Calculate npv and ror for project considering minimum rate

Assignment Help Financial Management

Reference no: EM131606876

$400,000 capital cost required for purchasing a machine (at time zero) that can generate revenue of $180,000 with operating cost of $35,000 for five years (from year 1 to year 5). The capital cost is depreciable over 6 years (from year 0 to year 5) based on MACRS 5-year life depreciation with the half year convention (table A-1 at IRS (Links to an external site.) Links to an external site.). The salvage value will be zero and working capital $50,000. Please calculate NPV and ROR for this project considering the minimum rate of return 12% and 38% income tax.

Reference no: EM131606876

Questions Cloud

What has been your average annual return over the four years : What has been your average annual return over the four years?

What rate of return would you earn if you bought this asset : What rate of return would you earn if you bought this asset?

Money is saved from owning relative to renting after selling : Identify how much money is saved from owning relative to renting after selling the house in year 5.

Estimate the annual tax savings from debt : Estimate the annual tax savings from debt. Assuming the company continues to have the same amount of debt forever, what is the present value of this tax shield?

Calculate npv and ror for project considering minimum rate : calculate NPV and ROR for this project considering the minimum rate of return 12% and 38% income tax.

What is the after tax salvage value of selling new machinery : What is the Operating Cash Flow in year two for this project? What is the after tax salvage value of selling the new machinery in three years?

Spreadsheet with the amortization and payment schedule : Create a spreadsheet with the amortization and payment schedule.

Net profit margin-quick ratio and debt-to-equity ratio : find the following Net Profit Margin, Quick Ratio and Debt-to-Equity Ratio

Selling stock with commissions : Selling Stock with Commissions At your full-service brokerage firm, it costs $120 per stock trade.

User Account

All Pages