Orange Inc., the Cupertino-based computer manufacturer, has developed a new all-in-one device: phone, music-player, camera, GPS, and computer
The device is called the iPip. The following data have been collected regarding the iPip project. The company has identified a prime piece of real estate and must purchase it immediately for $100,000. In addition, R&D expenditures of $175,000 must be made immediately. During the first year the manufacturing plant will be constructed. The plant will be ready for operation at the end of Year 1. The construction costs are $500,000 and will be paid upon completion. At the end of the Year 1, an inventory of raw materials will be purchased costing $50,000. Production and sales will occur during years 2 and 3. (Assume that all revenues and operating expenses are received (paid) at the end of each year.) Annual revenues are expected to be $850,000. Fixed operating expenses are $100,000 per year and variable operating expenses are 25% of sales. The construction facilities are classified as 10-year property for tax-depreciation purposes. When the plant is closed it will be sold for $200,000. (Note: Assume the investment in plant is depreciated during years 2 and 3.) The land will be sold for $225,000 at the end of year 3. The tax rate on all types of income is 34%. The cost of capital is 12%. What are the operating cash flows at the end of Year 2?
MACRS Depreciation Rates
Year 10-Year 15-Year
1 10.00% 5.00%
2 18.00% 9.50%
3 14.40% 8.55%
A) $304,750
B) $318,775
C) $321,750
D) $368,775
E) $371,750
E
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In Hendersonville, a group of salespeople get together for breakfast on the first and third Tuesday of each month. The purpose of their meeting is to share leads and prospecting tips. The group charges each member dues of $65 per quarter and participants must sell noncompetitive products. This group is an example of a(n):
A. illegal pyramid scheme. B. business network. C. list of prospects. D. sales lead club. E. orphan prospect club.
Restatement of the Law of Contracts is the agreed upon federal law in the United States
Indicate whether the statement is true or false
Answer the following statement(s) true (T) or false (F)
1. The prospectus is a statement that gives potential investors information about the firm, the management of the firm, its operations, and the purpose for the stock issue. 2. For an investment banker “best efforts” means that it has prepurchased a stock offering at less than par value and is making its best effort to sell the stock to other underwriters who will then sell the stock to the public. 3. Professional investors who invest for large groups such as pension funds are known as institutional investors. 4. Investors should invest in growth stocks if their goal is maximum dividends. 5. Investors should invest in security stocks if their goal is maximum rate of return.
Discuss the four background elements that can play an important role in determining a receiver's possible reaction and response to a message
What will be an ideal response?