About the net present value

Assignment Help Financial Management

Reference no: EM13924439

CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $493,000 is estimated to result in $192,000 in annual pretax cost savings. The press falls in the MACRS five-year class (MACRS Table), and it will have a salvage value at the end of the project of $59,000. The press also requires an initial investment in spare parts inventory of $21,800, along with an additional $3,800 in inventory for each succeeding year of the project. The shop’s tax rate is 34 percent and its discount rate is 12 percent.

Requirement 1: Calculate the NPV. (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Reference no: EM13924439

Questions Cloud

Compute the state transition matrix for system : Compute the state transition matrix for system - Determine the variation of the following functional and calculate the Hessian and show that it is singular at the origin.

Web application vulnerabilities and attacks : Examine three (3) common Web application vulnerabilities and attacks, and recommend corresponding mitigation strategies for each. Provide a rationale for your response.

Capital budgeting projects : Project Selection Midwest Water Works estimates that its WACC is 10.5%. The company is considering the following capital budgeting projects: Project Size Rate of Return A $1 million 12.0% B 2 million 11.5 C 2 million 11.2 D 2 million 11.0 E 1 million..

Examine the foundations of psychology : Prepare a 700- to 1,050-word paper in which you examine the foundations of psychology. In your paper be sure to address the following components:

About the net present value : CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $493,000 is estimated to result in $192,000 in annual pretax cost savings.

Strategic management process : Question 1 The goal of _____ is to balance the demand for greater profits while remaining environmentally sensitive Question 2 An example of external factors effecting an organization include Question 3 A _____ manager is responsible for ov..

What is the interpretation of r-square : What is the interpretation of R-square (just use the latest output) and how to calculate correlation based on it?

Standard deviation-smallest expected loss : A stock has an annual return of 11 percent and a standard deviation of 44 percent. What is the smallest expected loss over the next year with a probability of 1 percent?

Influence of heredity and environment : Distinguish between the influences of heredity and environment on the person's psychological development. Be sure to specify which area of psychological development: moral, emotional, or other.

User Account

All Pages