Calculate the net present value of investment

Assignment Help Finance Basics
Reference no: EM132627193

A company is evaluating an expansion. This capital investment will require a cash outflow today of $7,000,000. The firm estimates that the investment will pay out a cash flow of $975,000 per year for the next 15 years, and then nothing after. The risk adjusted discount rate required on this project is 11%, calculate the net present value of this investment. (Round to 2 decimals)

Reference no: EM132627193

Questions Cloud

Big data in radical platforms : Please pick an organization or two and discuss the usage of big data in RADICAL platforms including how big data analytics is used in those situations
What tax rates are applicable to these capital gains : Jeanette, an individual in the 24% marginal tax bracket, recognized a $20,000 long-term capital gain. What tax rates are applicable to these capital gains
Describe the ways of knowing in nursing : Which two ways of knowing have had the most influence on your understanding of nursing science? Which two ways of knowing have you not considered previously.
Calculate the amount she will need to deposit today : Calculate the amount she will need to deposit today to reach her retirement goal. (Enter a positive value and round to 2 decimals)
Calculate the net present value of investment : The risk adjusted discount rate required on this project is 11%, calculate the net present value of this investment. (Round to 2 decimals)
Calculate the present value of option b : Assuming a required rate of return of 5%, calculate the present value of option B.
Describe significant clinical issue : Describe a Significant Clinical Issue. Please review a current literature and provide an article that relates to the topic.
What can you do to decrease your risk : Determine what the risk factors are for the disease which are lifestyle related (meaning some behavior you can change). What can you do to decrease your risk?
Complete the income statement : a) Complete the income statement b) Complete the balance sheet c) Complete the statement of cash flows

Reviews

Write a Review

Finance Basics Questions & Answers

  Incorporated into a partnership contract

What are some incentives and how can/should they be specified in the contract?

  Should the ceo purchase the investment

The CEO will not purchase investments that have coefficients of variation greater than 0.70. Should the CEO purchase the investment?

  How does collateral affect the interest rate on a bond

How does collateral affect the interest rate on a bond? How does subordination affect the interest rate on a bond too? What else might affect the interest rate on a bond?

  Time value of money solution

How much more must Keith save each year (suppose end of the year payments) for each of next eight years to have enough savings to pay for his daughter? Assume Keith can earn 9% on his savings.

  Capital asset pricing model and beta

The capital asset pricing model (CAPM) relates the risk return trade-off of individual assets to market returns-Describe in detail the components of CAPM.

  Determining the loan interest rate

A bank agrees to lend you $4500 today in return for your promise to pay back $8,000 in 6 years (one payment at T6). What's the loan's interest rate (AER)?

  Calculate the annual equivalent shifted uniform series cost

A car company announced that it would offer three years of free maintenance after purchase for its new models that adds regular maintenance service.

  Congress increased the personal tax rate on interest,

If Congress increased the personal tax rate on interest, dividends, and capital gains, but simultaneously reduced the rate on corporate income, what effect would this have on the average company's capital structure? Explain.

  What suggestions do you have for quencher management

What suggestions do you have for Quencher management when and if the company decides to continue its Coca-Cola loss leader strategy?

  What does it mean that some of the provisions expire

What does it mean that some of the provisions expire in 2025? I'm a bit confused about that, can you please explain this to me?

  What is the amount of nickel total assets

What is the amount of Nickel's total assets at the end of 2011? What is the amount of Nickel's retained earnings at the end of 2011?

  Using discounted cash flow approach to find cost of equity

The earnings, dividends, and stock price of Carpetto Tech Corporation, are expected tp grow at 7 percent every year in the future. Carpetto's common stock sells for $23 each share,

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