Description / Instructions:
Complete the following in WileyPLUS: * Problem 10.14 * Problem 11.20 * Problem 11.24 * Problem 12.24 * Problem 13.11


Question 1 

Briarcrest Condiments is a spicemaking firm. Recently, it developed a new process for producing spices. The process requires new machinery that would cost $1,968,450. have a life of five years, and would produce the cash flows shown in the following table.
Year 
Cash Flow 
1 
$512,496 
2 
242,637 
3 
814,558 
4 
887,225 
5 
712,642 
What is the NPV if the discount rate is 15.9 percent? (Enter negative amounts using negative sign e.g. 45.25. Round answer to 2 decimal places, e.g. 15.25.)
NPV is 
$[removed] 

















Question 3 

Bell Mountain Vineyards is considering updating its current manual accounting system with a highend electronic system. While the new accounting system would save the company money, the cost of the system continues to decline. The Bell Mountainâ€™s opportunity cost of capital is 10 percent, and the costs and values of investments made at different times in the future are as follows:
Year 
Cost 
Value of Future Savings (at time of purchase) 
0 
$5,000 
$7,000 

1 
4,500 
7,000 

2 
4,000 
7,000 

3 
3,600 
7,000 

4 
3,300 
7,000 

5 
3,100 
7,000 

Calculate the NPV of each choice.
(Round answers to the nearest whole dollar, e.g. 5,275.)
The NPV of each choice is:
NPV_{0} = $[removed]
NPV_{1} = $[removed]
NPV_{2} = $[removed]
NPV_{3} = $[removed]
NPV_{4} = $[removed]
NPV_{5} = $[removed]
Suggest when should Bell Mountain buy the new accounting system?
Bell Mountain should purchase the system in [removed]. 

















Question 4 

Chipâ€™s Home Brew Whiskey management forecasts that if the firm sells each bottle of SnakeBite for $20, then the demand for the product will be 15,000 bottles per year, whereas sales will be 90 percent as high if the price is raised 10 percent. Chipâ€™s variable cost per bottle is $10, and the total fixed cash cost for the year is $100,000. Depreciation and amortization charges are $20,000, and the firm has a 30 percent marginal tax rate. Management anticipates an increased working capital need of $3,000 for the year. What will be the effect of the price increase on the firmâ€™s FCF for the year?
(Round answers to nearest whole dollar, e.g. 5,275.)
At $20 per bottle the Chipâ€™s FCF is $[removed] and at the new price Chipâ€™s FCF is $[removed]. 

















Question 5 

Capital Co. has a capital structure, based on current market values, that consists of 50 percent debt, 10 percent preferred stock, and 40 percent common stock. If the returns required by investors are 8 percent, 10 percent, and 15 percent for the debt, preferred stock, and common stock, respectively, what is Capitalâ€™s aftertax WACC? Assume that the firmâ€™s marginal tax rate is 40 percent.
(Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25%.)
After tax WACC 
= 
[removed] 
% 










