Ten Financial Management Questions Essay Example | Topics and Well Written Essays - 1500 words

Ten Financial solicitude Questions - Essay ExampleAdd bracketed tax 34% $119,000Add the cost of capital $ 35,000Total $504,000less(prenominal) depreciation of the old eggwhisk $54,000So the net cost of the new helicopter $450,000Question 4 Mud Construction Co. is considering buy a new equipment with cost of $625,000 and a salvage think of of $50,00 at the end of its useful bread and butter of ten years. The equipment is expected to gene set up additional annual cash feed for ten years with the following(a) possibilities. Probability Cash Flow 15 $60,000 25 $85,000 45 $110,000 15 $130,000a. What is the expected cash flowb. If the companys cost capital is 10% what is the expected net record gradec. Should the company buy the equipmenta. The cost of the equipment is $625,00010 years post installation salvage value $50,000With opportunity 15, cash flow $60,000The inflow of income 60,000x10=$600,000b. Salvage value after 10 years $600,000Hence the present value 600,000/10=$60,0 00c. The cash flow shows that the company gets a marginal profit, therefore it is not prudent to buy the equipment.Question 5 Explain how the price of a new security is determined security is the condition of being protected against danger or loss. In the general sense, security is a impression similar to safety. The nuance between the two is an added emphasis on being protected from dangers that prove from outside. Individuals or actions that encroach upon the condition of protection are responsible for the breach of security. A security is a fungible, negotiable interest representing financial value. Securities are broadly categorized into debt and equity...What is the approximate yield to maturity of the bondsQuestion 3 Bar T Ranches Inc, is considering buying a helicopter for $350,000. The companys old helicopter has a book value of $85,000, but will only bring $60,000 if it is sold. The old helicopter can be depreciated at the rate of $13,500 per year for next four years. T he new helicopter can be depreciated using the five-year MARCS schedule. The new helicopter is expected to save $62,000 after the taxes through reduced fuel and maintenance expenses. Bar T Ranches is in the 34% tax bracket and 12% cost of capital.Question 4 Mud Construction Co. is considering buying a new equipment with cost of $625,000 and a salvage value of $50,00 at the end of its useful life of ten years. The equipment is expected to generate additional annual cash flow for ten years with the following possibilities.Security is the condition of being protected against danger or loss. In the general sense, security is a concept similar to safety. The nuance between the two is an added emphasis on being protected from dangers that originate from outside. Individuals or actions that encroach upon the condition of protection are responsible for the breach of security. A security is a fungible, negotiable interest representing financial value. Securities are broadly categorized into debt and equity securities.