Questions from Financial Management

Q: You are considering introducing a new Tex-Mex–Thai fusion

You are considering introducing a new Tex-Mex–Thai fusion restaurant. The initial outlay for this new restaurant is $6 million, and the present value of the free cash flows (excluding the initial outl...

Q: Star Industries owns and operates landfills for several municipalities throughout the U

Star Industries owns and operates landfills for several municipalities throughout the U.S. Midwest. Star typically contracts with the municipality to provide landfill services for a period of 20 years...

Q: Go-Power Batteries has developed a high-voltage nickel–

Go-Power Batteries has developed a high-voltage nickel–metal hydride battery that can be used to power hybrid automobiles, and it can sell the technology immediately to Toyota for $10 million. Alterna...

Q: Koch Transportation is contemplating the acquisition of LH Transport, a competing

Koch Transportation is contemplating the acquisition of LH Transport, a competing trucking firm. Koch’s CFO estimates that during the next year LH Transport’s flows...

Q: Rao Roofing of Stillwater, Oklahoma, is also considering the acquisition

Rao Roofing of Stillwater, Oklahoma, is also considering the acquisition of Simpkins Storage Company. Rao’s management team has analyzed the annual cash flows for Simpkins and come u...

Q: Floating Homes, Inc., is a manufacturer of luxury pontoon and

Floating Homes, Inc., is a manufacturer of luxury pontoon and houseboats that sell for $40,000 to $100,000. To estimate its revenues for the following year, Floating Homes divides its boat sales into...

Q: Managers at the Physicians’ Bone and Joint (PB&J)

Managers at the Physicians’ Bone and Joint (PB&J) Clinic are considering whether to purchase a newly developed MRI machine that the manufacturer tells them will provide the basis...

Q: Family Security is considering introducing a tiny GPS tracker that is inserted

Family Security is considering introducing a tiny GPS tracker that is inserted in the sole of a child’s shoe, which would then allow for the tracking of that child if he or she was e...

Q: Blindfold Technologies Inc. (BTI) is considering whether to introduce

Blindfold Technologies Inc. (BTI) is considering whether to introduce a new line of hand scanners that can be used to copy material and then download it into a computer. These scanners are expected to...

Q: The Marvel Manufacturing Company is considering whether to construct a new robotic

The Marvel Manufacturing Company is considering whether to construct a new robotic production facility. The cost of this new facility is $600,000, and it will have a six-year life with annual deprecia...