Based on the irr and cost of capital

Assignment Help Financial Management
Reference no: EM132023378

A new IT server for a company will cost $425,469.00 today. The company expects the server will create an incremental cash flow to the firm of $141,695.00 per year. The company wants an 8.00% return for all capital budgeting projects. The company will run the server for the next 5 years. Based on the IRR and cost of capital, should they accept the project? (YES or NO) Answer Format: Text

Reference no: EM132023378

Questions Cloud

Conclusions is consistent with capital budgeting principles : Which of the following conclusions is consistent with capital budgeting principles discussed in this chapter?
Equivalent annual annuity of the most profitable project : Each project has a WACC of 9%. What is the equivalent annual annuity of the most profitable project?
Cheap system requires an initial cash outlay : Company Ujsag is considering buying new computers. Cheap System requires an initial cash outlay of $10000 and is expected to last 3 years;
Gas- powered and electric-powered forklift truck : Davis Industries must choose between a gas- powered and an electric-Powered forklift truck for moving materials in its factory.
Based on the irr and cost of capital : The company will run the server for the next 5 years. Based on the IRR and cost of capital, should they accept the project?
Evaluate the weighted average cost of capital of company : What is the capital structure of DYB on a market value basis? Evaluate the weighted average cost of capital (WACC) of the company.
Should the investor purchase this property : Based on the IRR of this investment, should the investor purchase this property?
What is the irr of project : The company will run the server for the next 5 years. What is the IRR of this project?
What is the irr of this investment : The investor wants to earn at least 7.00% on any real estate property. What is the IRR of this investment?

Reviews

Write a Review

Financial Management Questions & Answers

  Price quotation for boeing call option with strike price

The May 17, 2012, price quotation for a Boeing call option with a strike price of $88 due to expire in November is $30.30,

  What is your after-tax cost of money

What is your after-tax “cost of money” (taking into account that the interest payments on the bonds are tax-deductible)

  Compounding with different interest rates

Compounding with Different Interest Rates A deposit of $390 earns interest rates of 7.9 percent in the first year and 10.9 percent in the second year. What would be the second year future value?

  Reduce overall level of risk in portfolio

Which of the following will reduce overall level of risk in portfolio, and why?

  What is this inheritance worth

What is this inheritance worth to you today if you can earn 4.1 percent interest, compounded annually?

  Determine the cash flows associated with different trucks

Steve is a contract carrier for the United States Postal Service. He has been hauling mail for nearly thirty years. His current contract is to haul mail between 20 cities in the eleven western states. Determine the cash flows associated with the diff..

  Purchase maturities that match timing of their liabilities

The segmented market theory assumes that bond market participants are limited to purchase maturities that match the timing of their liabilities.

  What is maximum price you should be willing to pay for bond

You are considering the purchase of a 20-year, noncallable bond with a coupon rate of 8.0%. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require an 12% nominal yield to maturity on this investment, what is th..

  Sales ratio can be attributed to extraordinary growth

How much of this price/sales ratio can be attributed to extraordinary growth?

  What are open market operations

What are open market operations? What is the effect on the monetary base of an open market purchase?- What is the difference between the monetary base and the nonborrowed monetary base?

  Current yield-capital gains yield and yield to maturity

Pelzer Printing Inc. has bonds outstanding with 9 years left to maturity. What is the yield to maturity. For coming year, what is the expected current yield?

  Class set up mock portfolio of securities

Use the information learned in class set up a mock portfolio of securities (investments) You will invest $100,000 of imaginary money, and track the performance of your investments over the last eight weeks of class. Your investments can consist of mu..

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