Net Present Value and Additional Funds Needed

Virus Stopper Inc., a supplier of computer safeguard systems, uses a cost of capital of 12 percent to evaluate average-risk projects, and it adds or subtracts 2 percentage points to evaluate projects of more or less risk. Currently, two mutually exclusive projects are under consideration. Both have a cost of $200,000 and will last 4 years. Project A, a riskier-than-average project, will produce annual end of year cash flows of $71,104. Project B, of less than average risk, will produce cash flows of $146,411 at the end of Years 3 and 4 only. Virus Stopper should accept

1. B with a NPV of $10,001.
2. Both A and B because both have NPVs greater than zero.
3. B with a NPV of $8,042.
4. A with a NPV of $7,177.
5. A with a NPV of $15,968.

Jefferson City Computers has developed a forecasting model to determine the additional funds it needs in the upcoming year.
All else being equal, which of the following factors is likely to increase its additional funds needed (AFN)?

1. A sharp increase in its forecasted sales and the company’s fixed assets are at full capacity.
2. A reduction in its dividend payout ratio.
3. The company reduces its reliance on trade credit that sharply reduces its accounts payable.
4. Statements a and b are correct.
5. Statements a and c are correct.

Brown & Sons recently reported sales of $100 million, and net income equal to $5 million.
The company has $70 million in total assets. Over the next year, the company is forecasting a 20 percent increase in sales.
Since the company is at full capacity, its assets must increase in proportion to sales. The company also estimates that if sales increase 20 percent, spontaneous liabilities will increase by $2 million. If the company’s sales increase, its profit margin will remain at its current level. The company’s dividend payout ratio is 40 percent.
Based on the AFN formula, how much additional capital must the company raise in order to support the 20 percent increase in sales?

1. $2.0 million
2. $6.0 million
3. $8.4 million
4. $9.6 million
5. $14.0 million

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
*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
Upload your instructions
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 AssignmentHelpWeb
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.
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.
Excellent services will definitely come back
Customer 452441, September 23rd, 2022
The paper was EXCELLENT. Thank you
Customer 452449, September 23rd, 2022
excellent loved the services
Customer 452443, September 23rd, 2022
English 101
Very good job. I actually got an A
Customer 452443, September 25th, 2022
Architecture, Building and Planning
The assignment was well written and the paper was delivered on time. I really enjoyed your services.
Customer 452441, September 23rd, 2022
Job well done and completed in a timely fashioned!
Customer 452451, November 18th, 2022
Business Studies
Job well done. Finish paper faster than expected. Thank you!
Customer 452451, October 3rd, 2022
Thanks a lot the paper was excellent
Customer 452453, October 26th, 2022
Customer reviews in total
Current satisfaction rate
3 pages
Average paper length
Customers referred by a friend
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat