Granfield company has a piece of manufacturing equipment with a book value of $45,000 and a remaining useful life of four years. at the end of the four years the equipment will have a zero salvage value. the market value of the equipment is currently $23,000. granfield can purchase a new machine for $130,000 and receive $23,000 in return for trading in its old machine. the new machine will reduce variable manufacturing costs by $20,000 per year over the four-year life of the new machine. the total increase or decrease in net income by replacing the current machine with the new machine (ignoring the time value of money) is:

If a firm plans to issue new stock, flotation costs (investment bankers' fees) should not be ignored. there are two approaches to use to account for flotation costs. the first approach is to add the sum of flotation costs for the debt, preferred, and common stock and add them to the initial investment cost. because the investment cost is increased, the project's expected return is reduced so it may not meet the firm's hurdle rate for acceptance of the project. the second approach involves adjusting the cost of common equity as follows: . the difference between the flotation-adjusted cost of equity and the cost of equity calculated without the flotation adjustment represents the flotation cost adjustment. quantitative problem: barton industries expects next year's annual dividend, d1, to be $1.90 and it expects dividends to grow at a constant rate g = 4.3%. the firm's current common stock price, p0, is $22.00. if it needs to issue new common stock, the firm will encounter a 6% flotation cost, f. assume that the cost of equity calculated without the flotation adjustment is 12% and the cost of old common equity is 11.5%. what is the flotation cost adjustment that must be added to its cost of retaine

Suppose that a monopolistically competitive restaurant is currently serving 260 meals per day (the output where mr

According to herman, one of the differences of managing a nonprofit versus a for-profit corporation is