Question: 1. Will Increase in sales affect net working capital and NPV? 2. The minimum return that must be earned on a project in order to

1. Will Increase in sales affect net working capital and NPV?

2. The minimum return that must be earned on a project in order to leave the firm's value unchanged is: The interest rate, the cost of capital, the compound rate, or the internal rate of return?

Step by Step Solution

★★★★★

3.41 Rating (173 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

1 Yes Other things being constant when sales increases so does the amount of receivables As a resul... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

68-B-C-F-C-B (1422).docx

120 KBs Word File

Students Have Also Explored These Related Corporate Finance Questions!

How much interest will be earned on a 91-day $15,000 term deposit that pays an interest rate of 0.2% per annum?

Calculate Gross working capital , Net working capital and length of the Working Capital Cycle? Level of Activity = 1,040,000 units Selling Price = PKR 20 per unit Raw Material Cost = PKR 8 per unit...

Maximum Pension Fund is attempting to manage one of the bond portfolios under its management. The fund has identified three bonds that have five-year maturities and trade at a yield to maturity of 9...

The questions were written in the questions.doc file. And there were some links in the questions like as we did during the lecture, so I provided the lecture slides as well. HOMEWORK 5 1) The owner...

Compute the NPV, NWC Requirements, and Cash Flows. I provide suggestions for the problem below. Please think about how you would solve the problem before consulting the suggestions. Suggestions - The...

The excel homework assignment below has five tabs that cover five different topics: Net Present Value Analysis, Capital Budgeting and Cost of Capital, Working Capital, Management, Financial Ratio...

Your brother wants to borrow $10,000 from you. He has offered to pay you back $12,000 in a year. Show your work. If the cost of capital of this investment opportunity is 10%, what is the NPV? (Round...

Please see attached Document and give answers for all. Thanks Qz 9 Firm A uses straight-line depreciation. Firm B uses MACRS depreciation. Both firms bought $75,000 worth of equipment last year that...

1. If the net present value of a project is positive (nonzero), then the project's: A. PI will be less than 1. B. internal rate of return will exceed its required rate of return. C. costs exceed its...

Finance 1. The yield to maturity on a bond: A is fixed in the indenture. B is lower for higher risk bonds. C is the required rate of return on the bond. D is generally below the coupon interest rate....

Two samples, each of size n, are taken from a normal distribution with unknown mean and unknown standard deviation . A 90% confidence interval for is constructed with the first sample, and a 95%...

The Oahu Audio Company manufactures electronic subcomponents that can be sold as is or can be processed further into plug-in assemblies for a variety of intricate electronic equipment. The entire...

The E . N . D . partnership has the following capital balances as of the end of the current year: Pineda$ 1 2 0 , 0 0 0 Adams 1 0 0 , 0 0 0 Fergie 9 0 , 0 0 0 Gomez 8 0 , 0 0 0 Total capital$ 3 9 0 ,...

13. Volunteer at a daycare center, for a reading program, or for another activity. Write an incident report based on an event you witnessed or learned of. Address the report to the leader of the...

The trial balance before adjustment for Sinatra Company shows the following balances. InstructionsUsing the data above, give the journal entries required to record each of the following cases. (Each...

On July 1, 2012, Rentoul Inc. made two sales. 1. It sold land having a fair value of $900,000 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,416,163. The land...

On December 31, 2011, Hurly Co. performed environmental consulting services for Cascade Co. Cascade was short of cash, and Hurly Co. agreed to accept a $300,000 zero-interest-bearing note due...

3. Capital Structure and Leverage: Determining the Optimal Capital Structure The optimal capital structure is the one that the price of the firm's stock, and this generally cals for a Debticapilal...

4 Round Hammer is comparing two different capital structures: An all-equity plan (Plan 1) and a levered plan (Plan II). Under Plan I, the company would have 180,000 shares of stock outstanding. Under...

Interpret the result of the coefficient of the current account balance. Pf Si * W Bb cf. x X * Bc | Cc| Cc|M In| |M In| |M In| |1J GC|M Cc | Ac |1 Gc |1] GC | Ur| HC| NE & Gr |Bb Te Bb M Q IS * H + X...