EVA (Graded A+) - use as a guide only - 18692

Solution Posted by
arsalanahmed

arsalanahmed

Rating : (80)A
Solution Detail
Price: $9.00
  • From: Business,
  • Posted on: Wed 17 Jul, 2013
  • Request id: None
  • Purchased: 0 time(s)
  • Average Rating: No rating
Request Description

Asignación

 

Contesta las preguntas de repaso 1-1 y 1-6 que encontrarás en la página 9 del libro de texto.

Questions:

1-2   What is finance?  Explain how this field affects the lives of everyone and every organization.

1-2   Describe the field of managerial finance.  Why is the study of managerial finance importante regardless of the specific area of responsibility one has within the business firm?

 

 

Resuelve el problema 1-2 de la página 35 del libro de texto.

 

1-2   The managerial finance function and economic value added (EVA).  Ken Allen, capital budgeting analyst for Bally Gears, Inc., has been asked to evaluate a proposal.  The manager of the automotive division believes that replacing the robotics used on the heavy truck gear line will produce total benefits of $560,000 (in today’s dollars) over the next 5 years.  The existing robotics would produce benefits of $400,000  (also in today’s dollars) over that same time period.  An initial cash investment of $220,000 would be required to install the new equipment.  The manager estimates that the existing robotics can be sold for $70,000.  Show how Ken will apply marginal analysis techniques to determine the following:

 

 

  1. The marginal (added) benefits of the proposal new robotics.
  2. The marginal (added) cost of the proposed new robotics.
  3. The net benefit of the proposed new robotics.
  4. What  should Ken Allen recommend that the company do?  Why?
  5. What factors besides the costs and benefits should be considered before the final decision is made?
Solution Description

A++++++++

Attachments
New Wordpad Document.doc
New Wordpad Doc...