Calculate the net present value for this project

Assignment Help Financial Management
Reference no: EM131904205

1. A factory costs $380,000. You forecast it will produce cash inflows of $176,000 in year 1, $290,000 in year 2, and $350,000 in year 3. The cost of capital is 11%. What is the net present value (NPV) of the factory? The NPV of the factory is $ __. ?(Round to the nearest cent.)

2. Suppose you're presented with a proposal for a project that costs $4,300 and will bring in $20,200 the first year. The next year, you'll have to pay out $15,800. With a cost of capital of 14 %, calculate the net present value (NPV) for this project. The NPV of the project is $ ___. ?(Round to the nearest cent.)

Reference no: EM131904205

Questions Cloud

Incremental after-tax cash flows for loading machine : Calculate the incremental after-tax cash flows for the loading machine. Briefly explain why bond prices vary negatively with interest rate movements
Compute the discount rate and present value of total inflows : Calculate the present value of total outflows. Compute the discount rate. Calculate the present value of total inflows.
What is estimated internal rate of return of project : What is the estimated Internal Rate of Return (IRR) of the project? Should the project be ?accepted based on the IRR criterion? Why?
The present value of the cash inflows : A project has an initial investment of $203,700 and will generate 5 annual cash flows of $58,600. The present value of the cash inflows is $__.
Calculate the net present value for this project : Calculate the net present value (NPV) for this project. The NPV of the project is $ ___. ?
Central goal of financial management : According to our textbook, the central (primary) goal of financial management is to:
Assume the variance of return and the risk free rate : Which of the following options on corn is least valuable? Assume the variance of return and the risk free rate are the same in all cases.
Find present values of ordinary annuities : Find the present values of these ordinary annuities. Discounting occurs once a year.
What are arithmetic and geometric returns for stock : Arithmetic and Geometric Returns-What are the arithmetic and geometric returns for the stock?

Reviews

Write a Review

Financial Management Questions & Answers

  Time-value of money

The LPD company has a $10,000 note receivable from a customer due in three years. How much is the note worth today if the interest rate is 9%? What interest rate is implied if you buy a TV for $750 and pay in monthly installments of $66.64 for one ye..

  What is meant by the term liquidity

What is meant by the term liquidity? What is the difference between the current ratio and the quick ratio and why might a company be interested in quick ratio.

  How much after-tax operating income does the firm have

How much after-tax operating income does the firm have?

  Evaluate average-risk projects

Virus Stopper Inc., a supplier of computer safeguard systems, uses a cost of capital of 11 percent to evaluate average-risk projects,

  Cash in the business in exchange for common stock

Kristin Malone opened Kristin's Maids Cleaning Service on July 1, 2017. During July, the company completed the following transactions. July 1 Stockholders invested $14,000 cash in the business in exchange for common stock. 31 Paid gasoline for the mo..

  Should they be classified as supplies or equipment

Because Mei-ling has had such a successful first few months, she is considering other opportunities to develop her business. One opportunity is the sale of fine European mixers.  “Would you consider these mixers to be inventory or should they be clas..

  Paid out half of its earnings as dividends company

The company must have had zero net income in 2015 company must have paid out half of its earnings as dividends company must have paid no dividends in 2015.

  What is the enterprise value multiple

Preston Woods has 17,500 shares of stock outstanding along with $408,000 of interest bearing debt. The market and book values of the debt are the same. The firm has sales of $697,000 and a profit margin of 6.8 percent. The firm has $130,000 of curren..

  What is proper cash flow amount to use as initial investment

Kenny, Inc., is looking at setting up a new manufacturing plant in South Park. The company bought some land six years ago for $7.7 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent fac..

  What is the future value of ordinary annuity

What is the future value of an ordinary annuity that pays $4,600 per year for 4 years? The appropriate interest rate is 7 percent.

  Explain why limited leverage is good for business

Frank Smith has been a plumber in the college town of Turlock, CA for the last thirty years. All the people who know him call him Frankie because he is friendly, social, and charges a fair price for his services. His business has grown because new cu..

  What is the company pay-out ratio for the problem

What is the company’s pay-out ratio for the following problem: Pate & Co. has a capital budget of $3,000,000. The company wants to maintain a target capital structure that is 15% debt and 85% equity. The company forecasts that its net income this yea..

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