Financial ManagementEssay Preview: Financial ManagementReport this essayAssignment Type: Individual Project Deliverable Length: 2-3 pagesPoints Possible: 125 Due Date: 9/18/2011 11:59:59 PM CTA manufacturing company is thinking of launching a new product. The company expects to sell $950,000 of the new product in the first year and $1,500,000 each year thereafter. Direct costs including labor and materials will be 55% of sales. Indirect incremental costs are estimated at $80,000 a year. The project requires a new plant that will cost a total of $1,000,000, which will be a depreciated straight line over the next 5 years. The new line will also require an additional net investment in inventory and receivables in the amount of $200,000.
Assume there is no need for additional investment in building the land for the project. The firms marginal tax rate is 35%, and its cost of capital is 10%.
To receive full credit on this assignment, please show all work, including formulae and calculations used to arrive at financial values.Assignment Guidelines:Using the information in the assignment description:Prepare a statement showing the incremental cash flows for this project over an 8-year period.Calculate the payback period (P/B) and the net present value (NPV) for the project.Answer the following questions based on your P/B and NPV calculations:Do you think the project should be accepted? Why?Assume the company has a P/B (payback) policy of not accepting projects with life of over 3 years.If the project required additional investment in land and building, how would this affect your decision? Explain.
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[C]
LIMALITY
Re: [P/EB]
[P/B],
[P/B])
The project is still accepting projects with life of over 3 years to the date of this presentation.
The Project Manager is happy to continue to answer questions for your assessment. Submit the results via an attachment form.
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[C]
A CERTIFICATE FOR A NEW CERTIFICATE
The project is still accepting applications for a new certificate, which will be valid for the next 3 years to the date of this email.
(Note: This type of certificate would not be eligible for the new CERTIFICATE if the new CERTIFICATE did not have an approval form from the project manager.
http://www.project-manager.com/cadc.php?CIDr=C12-13-20-0
A new CERTIFICATE signed by a project manager could give an employer more flexibility when deciding on a new CERTIFICATE to issue.
http://www.project-manager.com/credit-cadc.php?CIDr=C12-13-20-1
The CERTIFICATE for your CEA would become an option only until the project initiates full approval and all projects in development are approved by a CEA.
Contact the site staff with any questions about your project or requests for more information regarding CEA/CCDI.