Fin370 week 3 team assignment caledonia products integrative problems

Don't use plagiarized sources. Get Your Assignment on
Fin370 week 3 team assignment caledonia products integrative problems
Just from \$13/Page

Calculating Free Cash Flow and Project Valuation

It’s been two months since you took a position as an assistant financial analyst at Caledonia Products. Although your boss has been pleased with your work, he is still a bit hesitant about unleashing you without supervision. Your next assignment involves both the calculation of the cash flows associated with a new investment under consideration and the evaluation of several mutually exclusive projects. Given your lack of tenure at Caledonia, you have been asked not only to provide a recommendation, but also to respond to a number of questions aimed at judging your understanding of the capital-budgeting process. The memorandum you received outlining your assignment follows:

To: The Assistant Financial Analyst

From: Mr. V. Morrison, CEO, Caledonia Products

Re: Cash Flow Analysis and Capital Rationing

We are considering the introduction of a new product. Currently we are in the 34% tax bracket with a 15% discount rate. This project is expected to last five years and then, because this is somewhat of a fad project, it will be terminated. The following information describes the new project:

 Cost of new plant and equipment: \$ 7,900,000 Shipping and installation costs: \$ 100,000 Unit sales:

 Year Units Sold 1 70,000 2 120,000 3 140,000 4 80,000 5 60,000

 Sales price per unit: \$300/unit in years 1–4 and \$260/unit in year 5. Variable cost per unit: \$180/unit Annual fixed costs: \$200,000 per year

Working capital requirements: There will be an initial working capital requirement of \$100,000 just to get production started. For each year, the total investment in net working capital will be equal to 10% of the dollar value of sales for that year. Thus, the investment in working capital will increase during years 1 through 3, then decrease in year 4. Finally, all working capital is liquidated at the termination of the project at the end of year 5.

Depreciation method: Straight-line over 5 years assuming the plant and equipment have no salvage value after 5 years.

Calculate the price
Pages (550 words)
\$0.00
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Homework Writing Services
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
Testimonials
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Social Work and Human Services
Excellent.
Customer 460073, June 20th, 2022
Good
Customer 463473, November 1st, 2022
Criminal Justice
this is an excellent paper
Customer 454221, April 3rd, 2020
Psychology
Good work.
Customer 462579, June 4th, 2022
English 101
Good work.
Customer 453625, May 25th, 2022
Other
Commendable.
Customer 462457, April 29th, 2022
Thank you!
Customer 453187, March 2nd, 2022
Other
Excellent work.
Customer 462823, April 21st, 2022
History
Excellent work.
Customer 463001, June 12th, 2022
English 101
Always use Grammarly before submitting your papers.
Customer 462495, April 6th, 2022
Thank you for the corrections. This is what I expected my paper to be.
Customer 460555, November 22nd, 2021
English 101