Assuming straight-line depreciation to zero

Assignment Help Financial Management
Reference no: EM131190136

Evaluate the project given the following information: Assuming straight-line depreciation to zero, what is the IRR of this project? Initial investment = $160,000; requires an initial investment in NWC = $15,000 cost savings = $65,000 per year; life = 5 years; salvage value = $12,000 in year 5; tax rate = 38%; discount rate = 12%.

Reference no: EM131190136

Questions Cloud

Can taxpayer use the exclusion for the sale of residence : Taxpayer a college professor age 58 purchased and moved into a house on August 1, 2012. He used the house continuously until 9/1/2013 on which date he went abroad for a one year sabbatical leave. During part of the period of leave, te property was un..
Determine the changes that should take place : Having curried out the study, the scores will get monitored for evaluations. Evaluations will involve analyzing the patient's satisfactions and dissatisfactions and determine the changes that should take place, where and when and what amount of mo..
How much interest would billy have to pay : Billy Thornton borrowed $20,000 at a rate of 7.25%, simple interest, with interest paid at the end of each month. The bank uses a 360-day year. How much interest would Billy have to pay in a 30-day month?
Reduce the working capital at the beginning of the project : Assume that you're able to reduce the working capital at the beginning of the project, and that the NWC will revert back to normal at the end of the project. If all other given information stays the same, what is the NPV of this project?
Assuming straight-line depreciation to zero : Evaluate the project given the following information: Assuming straight-line depreciation to zero, what is the IRR of this project? Initial investment = $160,000; requires an initial investment in NWC = $15,000 cost savings = $65,000 per year; life =..
Continue paying the salaries next year : Ron is unsure whether he should comply with the president's request. It doesn't seem to Ron that it is terribly important whether the expenses is recorded in December or January. Ron knows that the company needs the loan to continue paying the sal..
Considering an investment which has the cash flows : You are considering an investment which has the following cash flows. If you require a 4 year payback, should you take the investment? Year 0 1 2 3 4 5 6 Cash flow -35000 10000 5000 5000 7500 30000 20000 Which of the following is correct? 1.1. Yes, t..
Think about an investor-aggressive investor : Discuss the type of individual securities or mutual funds that you believe are suitable for an aggressive investor whose primary investment goal is capital accumulation over the longer term (say 10 years or more) and why. Now think about an investor ..
Use spss to conduct a one-way anova : Those in group 3 study with no sound at all. After studying, all students take a 10 point multiple choice test covering the material. The results are listed below. Use SPSS to conduct a one-way ANOVA to determine if Dr. Larm's hypothesis is correc..

Reviews

Write a Review

Financial Management Questions & Answers

  What is the sunk cost for new deluxe truck camper project

Hoosier Camper, Inc. is a manufacturer of truck campers. Its current line of truck campers are selling excellently. However, in order to cope with the foreseeable competition with other similar truck campers, HC spent $950,000 to develop a new line o..

  Retirement income plan

Your 68 year old mother plans to retire in 2 years and she expects to live independently for 3 years. She wants a retirement income that has, in the first year the same purchasing power as 60,000 has today. However her retirement income will be of a ..

  What does the mutual fund theory imply

What does the mutual fund theory imply?

  Which part of the architecture design

One of the advantages of doing business online is that business can be conducted 24 hours a day and 7 days a week. Which part of the architecture design allows this to happen?

  What is the cost of common equity

How can you use the cost of common equity found above under (a) to compute the cost of retained earnings? Assuming the company is privately held, would you expect them to rely more heavily on equity or retained earnings? Explain your rationale.

  Calculate the annual fuel savings

Your small remodeling business has two work vehicles. One is a small passenger car used for job-site visits and for other general business purposes. The other is a heavy truck used to haul equipment. The car gets 25 miles per gallon (mpg). Calculate ..

  Raising the money through debt will increase the riskiness

Tim Sands the founder of the water boots Inc needs to raise $500,000 to expend his company's operations he has been told that raising the money through debt will increase the riskiness of his company much more than issuing stock he doesn't understand..

  Bonds on the market making semiannual payments

XYZ Enterprises has bonds on the market making semiannual payments, with 1 years to maturity. You require a 10%ROI (YTM) and this bond offers 10% coupon rate assuming $1, 000 “par value”. What should you pay for this bond? Calculations

  Challenge of global promotion is not simply to communicate

The challenge of global promotion is not simply to communicate across culturally diverse country markets, but to also achieve integrated marketing messages among the different media forms used to reach targeted customers.

  Calculate operating cash flow using different approaches

A proposed new project has projected sales of $135,000, costs of $69,000, and depreciation of $13,800. The tax rate is 30 percent. Calculate operating cash flow using the four different approaches.

  Risk-averse but can invest in only one of three securities

Suppose your client is risk-averse but can invest in only one of the three securities, A, B, or C, in an uncertain world characterized as follows. Next year the economy will be in an expansion, normal, or recession state with probabilities 0.43, 0.31..

  Make long term investment decisions for sustainability

Businesses must make long term investment decisions for sustainability. Critical questions such as which assets to invest in and at what cost to the organization are crucial the future viability of the business. What is the role and importance of mak..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd