Questions from General Finance

Q: McDoogals Restaurants has come up with a new fast-food,

McDoogals Restaurants has come up with a new fast-food, casual restaurant combining some of the features of Chipotle, Panera, and Shake Shack, but it is not quite sure how the public will react to it....

Q: Hewlett-Packard has designed a new type of printer that produces

Hewlett-Packard has designed a new type of printer that produces professional-quality photos. These new printers took 2 years to develop, with research and development running at $10 million after tax...

Q: The G. Wolfe Corporation is examining two capital-budgeting projects

The G. Wolfe Corporation is examining two capital-budgeting projects with 5-year lives. The first, project A, is a replacement project; the second, project B, is a project unrelated to current operati...

Q: The J. Harris Corporation is considering selling one of its old

The J. Harris Corporation is considering selling one of its old assembly machines. The machine, purchased for $30,000 5 years ago, had an expected life of 10 years and an expected salvage value of zer...

Q: Racin’ Scooters is introducing a new product and has an expected change

Racin’ Scooters is introducing a new product and has an expected change in EBIT of $475,000. Racin’ Scooters has a 34 percent marginal tax rate. The project will pr...

Q: Spartan Stores is expanding operations with the introduction of a new distribution

Spartan Stores is expanding operations with the introduction of a new distribution center. Not only will sales increase but investment in inventory will decline due to increased efficiencies in gettin...

Q: Assume that a new project will annually generate revenues of $2

Assume that a new project will annually generate revenues of $2 million. Cash expenses including both fixed and variable costs will be $800,000, and depreciation will increase by $200,000 per year. In...

Q: At present, Solartech Skateboards is considering expanding its product line to

At present, Solartech Skateboards is considering expanding its product line to include gas-powered skateboards; however, it is questionable how well they will be received by skateboarders. Although yo...

Q: You are considering new elliptical trainers and you feel you can sell

You are considering new elliptical trainers and you feel you can sell 5,000 of these per year for 5 years (after which time this project is expected to shut down when it is learned that being fit is u...

Q: New Wave Surfing Stuff Inc. is a manufacturer of surfboards and

New Wave Surfing Stuff Inc. is a manufacturer of surfboards and related gear that sells to exclusive surf shops located in several Atlantic and Pacific mainland coastal towns as well as several Hawaii...