User Account

All Pages

Calculate the base-case cash flow and NPV

Assignment Help Accounting Basics
Reference no: EM132722308

Question - A firm is evaluating a project that costs RM125,000, has a six-year life and has a salvage value of RM14,000. Assume that depreciation is straight line on the life of the project. Working capital of RM 15,000 is needed initially and the same will be released in the final year. Sales are projected at 25,000 units per year with a selling price of RM 10.50 per unit, variable cost RM 7.50 per unit, and fixed costs are RM 20,000 per year. The tax rate is 25% and the required rate of return is 13% on this project.

Required -

1. Calculate the base-case cash flow and NPV. Interpret your findings.  

2. Compute the internal rate of return (IRR).

Reference no: EM132722308

Questions Cloud

Explain two operational steps company : Suppose you work for Citibank in Thailand and you are considering making a loan to a Thai company that produces auto transmissions and has the following
Prepare the appropriate general journal entries : Harrison Forklift's pension expense includes a service cost of $24 million. Prepare the appropriate general journal entries
What percentage of the total voting rights do hold : Anzio, Inc., If you own 1 1% of the Class A shares and 29% of the Class B shares, what percentage of the total voting rights do you hold?
What is the total volume variance for labor : Product with an actual labor cost of $10 each. What is total labor cost in the flexible budget and what is the total volume variance for labor
Calculate the base-case cash flow and NPV : A firm is evaluating a project that costs RM125,000, has a six-year life and has a salvage value of RM14,000. Calculate the base-case cash flow and NPV
What is the cyclotron division return on sales : What is the Cyclotron Division's return on sales? Operating assets reported as $1,000,000. Operating costs reported as $1,200,000
Record the net variance allocated to ending inventories : Patel and Sons Inc. uses a standard cost system to apply factory, Record the net variance allocated to ending inventories and Cost of goods sold.
Risk of an average one-stock portfolio : The total risk of a well-diversified portfolio of U.S. stocks appears to be about what proportion of the risk of an average one-stock portfolio?
What is the cost of raw materials used using fifo : What is the cost of raw materials used in 2020 using FIFO? April, of 17,000 units at 50 per unit and on July, of 10,000 units at 60 per unit.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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