Chandler Corp. is expecting a new project to start producing cash flows, beginning at the end...

Question

Question

business finance

Answer 1

Answer #1

Therefore, Option A is the correct Answer

b)	Sales for the current year= $1,233,450 (S0)
	Growth rate= 16%
	Expected income $3,000,000
	To find= No of years to reach $3,000,000

	Sales of S1= $1,233,450*116%= $1,430,802
	Sales of S2= $1,430,802*116%= $ 1,659,730.32
	Sales of S3= $1,659,730.32*116%= $1,925,287.1712
	Sales of S4= $1,925,287.1712*116%= $2,233,333.11859
	Sales of S5= $2,233,333.11859*116%= $2,590,666.41756
	Sales of S6= $2,590,666.41756*116%= $3,005,173.04436

	Therefore, it will take approximately 6 years to reach $3 millions earnings
	Option A is the correct answer

Answer 2

Similar Homework Help Questions

Helen Ashley is expecting cash flows of $4,000, $20,000, $9,000, and $32,000 from an inheritance over...

Helen Ashley is expecting cash flows of $4,000, $20,000, $9,000, and $32,000 from an inheritance over the next four years. If she can earn 9.0 percent on any investment that she makes, what is the present value of her inheritance? (Round to the nearest cent.)
For the following mixed stream of cash flows, determine the future value at the end of...

For the following mixed stream of cash flows, determine the future value at the end of Year 3. Assume annual interest of 15% and that no withdrawals are made during the period. Year 0 Cash Flow Stream 18,000 8,900 7,300 1 2 Year 0 Cash Flow Stream 18,000 8,900 7,300 1 2 Future Value ($) = (Round to the nearest cent.)
1 Suppose that XYZ Corp. will generate free-cash-flows (FCF) of $200 at the end of the...

1 Suppose that XYZ Corp. will generate free-cash-flows (FCF) of $200 at the end of the year. XYZ has a cost of equity capital of 10%, a cost of debt capital of 5%, a market value debt-to-equity ratio of one, and faces a 21% tax rate. Assuming that XYZ’s FCF will grow by 3% per year in the future, what is the value of XYZ Corp? Round your final answer to two decimals? 2 Suppose that XYZ Corp. will generate...

1. Suppose that XYZ Corp. will generate free-cash-flows (FCF) of $200 at the end of the...

1. Suppose that XYZ Corp. will generate free-cash-flows (FCF) of $200 at the end of the year. XYZ has a cost of equity capital of 10%, a cost of debt capital of 5%, a market value debt-to-equity ratio of one, and faces a 21% tax rate. Assuming that XYZ’s FCF will grow by 3% per year in the future, what is the value of XYZ Corp? Round your final answer to two decimals? 2. Suppose that XYZ Corp. will generate...
d) $1.36 c) $1.49 € 1o27 000 24) You are expecting annual cash flows of $80,000...

d) $1.36 c) $1.49 € 1o27 000 24) You are expecting annual cash flows of $80,000 in years 1-3; $95.000 in ycars 6-20; and $105,000 in ycars 21-50. If the rate of interest is 10% compounded annually. calculate the future value of this cash flow stream. a) 5103.54 million 49$,vos b) $104.54 million. $S105.54 million. d) $106.54 million. c) $107.54 million. EZ 67 672
Sunland, Inc., management expects the company to earn cash flows of $11,800, $16,400, $18,900, and $19,100...

Sunland, Inc., management expects the company to earn cash flows of $11,800, $16,400, $18,900, and $19,100 over the next four years. If the company uses an 10 percent discount rate, what is the future value of these cash flows at the end of year 4? (Round answer to 2 decimal places, e.g. 15.25. Do not round factor values.) Future value $

Robert White will receive from his investment cash flows of $4,450, $4,775, and $5,125. If he...

Robert White will receive from his investment cash flows of $4,450, $4,775, and $5,125. If he can earn 7 percent on any investment that he makes, what is the future value of his investment cash flows at the end of three years? (Round to the nearest dollar.)
Consider the following cash flows: Year Cash Flow 2 $ 21,400 3 39,400 5 57,400 Assume...

Consider the following cash flows: Year Cash Flow 2 $ 21,400 3 39,400 5 57,400 Assume an interest rate of 8.2 percent per year. If today is Year 0, what is the future value of the cash flows five years from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Future value $ If today is Year 0, what is the future value of the cash flows ten years from now? (Do not...
Reginald is expecting steady growth of 10 percent per year in profits from his new company....

Reginald is expecting steady growth of 10 percent per year in profits from his new company. All profits are going to be invested at 20 percent interest. If profits for this year (at the end of the year) total 10000$, how much will be saved at the end of 10 years ? Answer : 35981.09 $ Can you please try to find the Present Value first, then the Future Value ? Thank you

(Calculating inflation and project cash flows) Carlyle Chemicals is evaluating a new chemical compound used in...

(Calculating inflation and project cash flows) Carlyle Chemicals is evaluating a new chemical compound used in the manufacture of a wide range of consumer products. The firm is concerned that inflation in the cost of raw materials will have an adverse effect on the project's cash flows. Specifically, the firm expects that the cost per unit (which is currently $ 0.87 will rise at a rate of 13 percent annually over the next three years. The per-unit selling price is...