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Author Question: What are the implications for a firm's capital investment decisions of using a company-wide cost of ... (Read 63 times)

yoooooman

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on: Jul 10, 2018
What are the implications for a firm's capital investment decisions of using a company-wide cost of capital
  when the firm has multiple operating divisions that have unique risk attributes and capital costs?
 
  What will be an ideal response?

Question 2

AFB Corp needs to replace an old lathe with a new, more efficient model. The old lathe was
  purchased for 50,000 nine years ago and has a current book value of 5,000.
 
  (The old machine is
  being depreciated on a straight-line basis over a ten-year useful life.) The new lathe costs 100,000.
  It will cost the company 10,000 to get the new lathe to the factory and get it installed. The old
  machine will be sold as scrap metal for 2,000. The new machine is also being depreciated on a
  straight-line basis over ten years. Sales are expected to increase by 8,000 per year while operating
  expenses are expected to decrease by 12,000 per year. AFB's marginal tax rate is 40. Additional
  working capital of 3,000 is required to maintain the new machine and higher sales level. The new
  lathe is expected to be sold for 5,000 at the end of the project's ten-year life. What is the
  incremental free cash flow during years 2 through 10 of the project?
  A) 15,800 B) 14,400 C) 16,400 D) 13,600
Foundations of Finance ¦ Keown, Petty, Martin ¦ 9th Edition
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TDubDCFL

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Reply #1 on: Jul 10, 2018
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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yoooooman

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Reply 2 on: Jul 10, 2018
Gracias!

dyrone

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Reply 3 on: Yesterday
Excellent

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