Question: Please help me solve the following problems sent value. Lepton Industries has four potential projects, all with an initial cost of $1,500,000. The capital budget
Please help me solve the following problems
sent value. Lepton Industries has four potential projects, all with an initial cost of $1,500,000. The capital budget for the year will allow Lepton to accept only one St projects. Given the discount rate and the future cash flow of each project, determine which project Lepton should accept. Cash Flow Project Q Project R Project S Project T Cash flow year 1 $350,000 $400,000 $700,000 $ 200,000 Cash flow year 2 $350,000 $400,000 $600,000 $ 400,000 Cash flow year 3 $350,000 $400,000 $500,000 $ 600,000 Cash flow year 4 $350,000 $400,000 $400,000 $ 800,000 Cash flow year 5 $350,000 $400,000 $300,000 $1,000,000 Discount rate 4% 8% 13% 18% 6. Working capital cash flow. Tires for Less is a franchise of tire stores throughout the greater Northwest. It has projected the following unit sales and costs for each tire type for the coming year: Snow Tires Rain Tires All-Terrain Tires All-Purpose Tires Cost per tire $ 42 $ 31 $ 48 $ 37 Sales: Jan. $44,000 $20,000 $ 4,000 Book Content $60,000 Sales: Feb. $38,000 $36,000 $ 5,000 $54,000 Sales: Mar. $14,000 $46,000 $ 7,000 $50,000 Sales: Apr. $ 2,000 $22,000 $ 8,000 $60,000 Sales: May $ 0 $40,000 $12,000 $65,000 Sales: Jun. $ 0 $20,000 $30,000 $68,000 Sales: Jul. $ 0 $ 2,000 $39,000 $75,000 Sales: Aug. $ 0 $ 2,000 $22,000 $80,000 Sales: Sep. $ 0 $ 2,000 $ 8,000 $70,000 Sales: Oct. $ 0 $14,000 $ 2,000 $70,000 Sales: Nov. $16,000 $18,000 $ 1,000 $65,000 Sales: Dec. $82,000 $20,000 $ 3,000 $60,000' Sales: Dec. ' $82,000 ' $20,000 ' $ 3,000 ' $60,000 Sales: Jan. $48,000 $22,000 $ 5,000 $60,000 The company policy is to have the next month's anticipated sales for each tire type in the warehouse. Shipments are made to the various stores throughout the Northwest from the central warehouse. Show the anticipated cost of tires each month for these projected sales by tire type, the beginning inventory volume and ending inventory volume each month for each tire type, and the monthly increase or decrease in cash flow for inventory given that an increase is a use of cash and a decrease is a source of cash. Find the total cost of goods sold and the change in monthly working capital cash flow for all tires. What do you notice about the working capital change when you combine the cash flows of all four tires? 1. WACC. Eric has another get-rich-quick idea, but needs funding to support it. He chooses an all-debt funding scenario. He will borrow $2,000 from Wendy, who will charge him 6% on the loan. He will also borrow $1,500 from Bebe, who will charge him 8% on the loan, and $800 from Shelly, who will charge him 14% on the loan. What is the weighted average cost of capital for Eric? 2. WACC. Grey's Pharmaceuticals has a new project that will require funding of $4 million. The company has decided to pursue an all-debt scenario. Grey's has made an agreement with four lenders for the needed financing. These lenders will advance the following amounts at the interest rates shown: Lender Amount Interest Rate Stevens $1,500,000 1% Yang $1,200,000 9% Shepherd $1,000,000 7% Bailey $ 300,000 8%
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