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 1195 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?

Anti-aging claims should not ever be believed. There is no supplement, medication, or any other substance that has been proven to slow or stop the aging process.

Did you know?

Medication errors are three times higher among children and infants than with adults.

Did you know?

The first war in which wide-scale use of anesthetics occurred was the Civil War, and 80% of all wounds were in the extremities.

Did you know?

The longest a person has survived after a heart transplant is 24 years.

Did you know?

Signs and symptoms of a drug overdose include losing consciousness, fever or sweating, breathing problems, abnormal pulse, and changes in skin color.

Defibrillator. Defibrillators are devices that supply a voltage charge to the heart in the hope of r Defibrillator. Defibrillators are devices that supply a voltage charge to the heart in the hope of r
How to calculate regular payments or deposits using the annuity formula (Question 1) How to calculate regular payments or deposits using the annuity formula (Question 1)
The Farm-to-Table Continuum The Farm-to-Table Continuum
Calc homework question Calc homework question
economic question economic question
economic question economic question
Video: Facilitated Diffusion - Glucose transport

For a complete list of videos, visit our video library