This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Use the table for the question(s) below.Year 0Year 1Year 2Year 3Revenues400,000400,000400,000-Cost ... (Read 1253 times)

jayhills49

  • Hero Member
  • *****
  • Posts: 559
on: Jul 9, 2019
Use the table for the question(s) below.

Year 0Year 1Year 2Year 3
Revenues400,000400,000400,000
-Cost of Goods Sold-180,000-180,000-180,000
​
-Depreciation-100,000-100,000-100,000
=EBIT120,000120,000120,000
​
-Taxes (35%)-42,000-42,000-42,000
=Unlevered net income78,00078,00078,000
​
+Depreciation100,000100,000100,000
​
-Additions to Net Working Capital-20,000-20,000-20,000
​
-Capital Expenditures-300,000
=Free Cash Flow158,000158,000158,000
​


Visby Rides, a livery car company, is considering buying some new luxury cars. After extensive research, they come up with the above estimates of free cash flow from this project. Visby learns that a competitor is thinking of offering similar services, thus reducing Visby's sales. By how much could sales fall before the net present value (NPV) was zero, given that the cost of capital is 10%, and that cost of goods sold is 45% of revenues?
◦ by 18%
◦ by 24%
◦ by 26%
◦ by 12%
Fundamentals of Corporate Finance ¦ Berk, DeMarzo, Harford ¦ 2nd Edition
Buy Test-Bank


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by jayhills49 on Jul 9, 2019

spencer.martell

  • Sr. Member
  • ****
  • Posts: 342
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.
Answer Preview
Only 32% of students answer this correctly


jayhills49

  • Hero Member
  • *****
  • Posts: 559
Reply #2 on: Jul 9, 2019
Thanks


spencer.martell

  • Sr. Member
  • ****
  • Posts: 342
Reply #3 on: Jul 9, 2019
Welcome :)


Sam R

  • Newbie
  • *
  • Posts: 1
Reply #4 on: Apr 20, 2020
thank you


K K

  • Newbie
  • *
  • Posts: 1
Reply #5 on: May 6, 2021
Thank you


Zhen Yu

  • Newbie
  • *
  • Posts: 1
Reply #6 on: Jul 11, 2021
thankyou


« previous next »
 

Did you know?

The most common treatment options for addiction include psychotherapy, support groups, and individual counseling.

Did you know?

Cytomegalovirus affects nearly the same amount of newborns every year as Down syndrome.

Did you know?

Your heart beats over 36 million times a year.

Did you know?

Thyroid conditions cause a higher risk of fibromyalgia and chronic fatigue syndrome.

Did you know?

Cutaneous mucormycosis is a rare fungal infection that has been fatal in at least 29% of cases, and in as many as 83% of cases, depending on the patient's health prior to infection. It has occurred often after natural disasters such as tornados, and early treatment is essential.

Fluidization - Calibration Table Pump #2 Fluidization - Calibration Table Pump #2
With the arm placed on the table, apply effleurage over the entire upper limb as a reconnecting and ... With the arm placed on the table, apply effleurage over the entire upper limb as a reconnecting and ...
Chelsea Donahue has a​ 20-year home mortgage of ​78,000 at​ 7.50% interest and will pay ... Chelsea Donahue has a​ 20-year home mortgage of ​78,000 at​ 7.50% interest and will pay ...
economic question economic question
economic question (having trouble) economic question (having trouble)
Boat question Boat question
Video: Stretch reflex & Tendon reflex

For a complete list of videos, visit our video library