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Author Question: Use the table for the question(s) below.Year 0Years 1 to 10Revenues3.50-Manufacturing ... (Read 41 times)

TVarnum

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on: Jul 9, 2019
Use the table for the question(s) below.

Year 0Years 1 to 10
Revenues3.50
-Manufacturing Expenses-0.5
-Marketing Expenses-0.25
-Depreciation-0.8
=EBIT1.95
-Taxes (40%)-0.78
=Unlevered net income1.17
+Depreciation+0.8
-Additions to Net Working Capital-0.2
-Capital Expenditures-8.00
=Free Cash Flow1.77


Panjandrum Industries, a manufacturer of industrial piping, is evaluating whether it should expand into the sale of plastic fittings for home garden sprinkler systems. It has made the above estimates of free cash flows resulting from such a decision (all quantities in millions of dollars). There are some concerns that estimates of manufacturing expenses may be low, due to the rising cost of raw materials. What is the break-even point for manufacturing expenses, if all other estimates are correct and the cost of capital is 10%?
◦ $1.22 million
◦ $0.78 million
◦ $0.88 million
◦ $0.97 million
Fundamentals of Corporate Finance ¦ Berk, DeMarzo, Harford ¦ 2nd Edition
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Marked as best answer by TVarnum on Jul 9, 2019

durant1234

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Reply #1 on: Jul 9, 2019
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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TVarnum

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Reply 2 on: Jul 9, 2019
YES! Correct, THANKS for helping me on my review

carlsona147

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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