Calculate the net present value of project

Assignment Help Financial Management
Reference no: EM131926470

A project costs $12,800 and is expected to provide a real cash inflow of $10,000 at the end of each of years 1 through 5. Calculate the net present value of this project if the firm employs a real discount rate of 6.5% after inflation. [EXCEL Formula = PV] [Hint: PV of Cash Flows – Initial Investment = Net Present Value]

Reference no: EM131926470

Questions Cloud

What are incremental free cash flows associated : What are the incremental free cash flows associated with the new? machine? The free cash flow for year 0 will be ?$
What will be optimal upper cash limit : The trading cost per sale or purchase of marketable securities to be $300 per transaction. What will be its optimal upper cash limit?
What is the interest tax shield : Incite Co. has a 34 percent tax rate. Its total interest payment for the year just ended was $37.4 million.
Second paper clip without the kitchen magnet help : The paper clip is already magnetized and can pick up a second paper clip without the kitchen magnet's help.
Calculate the net present value of project : Calculate the net present value of this project if the firm employs a real discount rate of 6.5% after inflation.
The difference between a retailing firm and manufacturer : Briefly describe the difference between a retailing firm and manufacturer's disclosure of inventories on the balance sheet.
What would be the project irr using above data : Using an opportunity cost of capital of 12%, what is the Net Present Value? What would be the project IRR using the above data?
Position of an element on the periodic table : What are valence electrons? How do the number of valence electrons control the position of an element on the periodic table?
Where do you like most companies fail in the execution : It is important for a firm to understand the different strategy's that have for the various activities involved in the business.

Reviews

Write a Review

Financial Management Questions & Answers

  Straight-line to zero over three-year project life for book

Fixed asset is classified as five-year asset under MACRS for taxes-will be depreciated straight-line to zero over three-year project life for book accounting.

  Identify and discuss three factors that limit the risk

Identify and discuss three factors that limit the insurability of risk. Define parameter uncertainty and correlation.

  What is total return to investor who held the bond

An 8.7%, twenty-year bond yields 6.7%. If the yield remains unchanged, what will be its price one year hence? Assume annual coupon payments. What is the total return to an investor who held the bond over this year?

  Lifetime of vehicle in compasion to non-hybrid version

The hybrid fusion saves fuel for the lifetime of the vehicle in compasion to the non-hybrid version.

  What is the rate of return of the oppurtunity

You have an investment oppurtunity that requires an initial investment of $2,600 today and will pay $5,000 in one year. What is the Rate of return of the oppurtunity?

  Average collection period and the average payment period

You know the following. ATO, ITO and FATO are 2, 6, and 2.5 respectively while for the industry they are 4.4, 19 and 4 respectively. The current ratio and quick ratio are 1 and 1.5 for the firm and 2.3 and 2.0 for the industry respectively. Net profi..

  What was the firms end-of-year cash balance

You have just been hired as a financial analyst for Basel Industries. Unfortunately, company headquarters (where all of the firm's records are kept) has been destroyed by fire. So, your first job will be to recreate the firm's cash flow statement for..

  Average annual compound rate of interest on loan

Bobby borrowed $7,000 from his father to purchase a high-end bike. Bobby paid back $9,000 to his father at the end of 4 years. What was the average annual compound rate of interest on Bobby’s loan from his father?

  Individual retirement? account

At age 23?, someone sets up an IRA? (individual retirement? account) with an APR of 55?%. At the end of each month he deposits ?$50 in the account. How much will the IRA contain when he retires at age? 65? Compare that amount to the total deposits ma..

  Considering the replacement of old riveting machine

The old machine has been fully depreciated and has no salvage value. What is the NPV of the project?

  Purchased the mining rights for gold mine

The Black Mountain Mining Company has just purchased the mining rights for a gold mine for $150 million.

  Thinking of her home as leveraged investment

Thinking of her home as a leveraged investment, what rate of return (based on her original investment-only the down payment) did Cindy receive from this home?

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