# Quick Computing finance homework

Quick Computing finance homework Student Help

1. Quick Computing currently sells 16 million computer chips each year at a price of \$30 per chip. It is about to introduce a new chip, and it forecasts annual sales of 18 million of these improved chips at a price of \$38 each. However, demand for the old chip will decrease, and sales of the old chip are expected to fall to 2 million per year. The old chip costs \$15 each to manufacture, and the new ones will cost \$18 each. What is the proper cash flow to use to evaluate the present value of the introduction of the new chip? (Enter your answer in millions.)

Cash flow
\$
million

Don’t use plagiarized sources. Get Your Custom Essay on
Quick Computing finance homework
Just from \$9/Page

Order Essay

2.

Tubby Toys estimates that its new line of rubber ducks will generate sales of \$7.80 million, operating costs of \$4.80 million, and a depreciation expense of \$1.80 million. Assume the tax rate is 30%.

a.
Calculate the operating cash flow for the year by using all three methods: (a) adjusted accounting profits; (b) cash inflow/cash outflow analysis; and (c) the depreciation tax shield approach. (Enter your answers in millions rounded to 2 decimal places.)

Method
Cash Flow

\$ million

Cash inflow/cash outflow analysis
million

Depreciation tax shield approach
million

b.

Yes

No

3.

The owner of a bicycle repair shop forecasts revenues of \$164,000 a year. Variable costs will be \$51,000, and rental costs for the shop are \$31,000 a year. Depreciation on the repair tools will be \$11,000. Prepare an income statement for the shop based on these estimates. The tax rate is 40%. (Input all amounts as positive values.)

INCOME STATEMENT

\$

Rental costs

\$

4.

Laurel’s Lawn Care, Ltd., has a new mower line that can generate revenues of \$168,000 per year. Direct production costs are \$56,000, and the fixed costs of maintaining the lawn mower factory are \$23,000 a year. The factory originally cost \$1.4 million and is being depreciated for tax purposes over 25 years using straight-line depreciation. Calculate the operating cash flows of the project if the firm’s tax bracket is 40%. (Enter your answer in dollars not in millions.)

Operating cash flows
\$

5.

Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the glueball for \$180,000 and sell its old low-pressure glueball, which is fully depreciated, for \$32,000. The new equipment has a 10-year useful life and will save \$40,000 a year in expenses. The opportunity cost of capital is 8%, and the firm’s tax rate is 40%. What is the equivalent annual savings from the purchase if Gluon uses straight-line depreciation? Assume the new machine will have  no salvage value. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Equivalent annual savings
\$

6.

Johnny’s Lunches is considering purchasing a new, energy-efficient grill. The grill will cost \$45,000 and will be depreciated according to the 3-year MACRS schedule. It will be sold for scrap metal after 3 years for \$11,250. The grill will have no effect on revenues but will save Johnny’s \$22,500 in energy expenses per year. The tax rate is 30%. Use the MACRS depreciation schedule .

a.
What are the operating cash flows in each year? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Year
Operating Cash Flows

1
\$

2

3

b.
What are the total cash flows in each year? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.)

Continue to order
Get a quote

Assignment DescriptionMarginal Product of Labor

## Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors:
Number of pages
Urgency
Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

# Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

### Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

### Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

### Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.