Solve the net present value? of the contract

Assignment Help Financial Accounting
Reference no: EM132914002

A contract is estimated to yield net annual returns of $24,000 for nine years. To secure the contract, an immediate outlay of $125,000 is required. Interest is 13% compounded annually.

Problem 1: Calculate the net present value (NPV) of the contract and determine whether the project should be accepted or rejected according to the net present value criterion.

Reference no: EM132914002

Questions Cloud

Calculate the effective yield : The investor converts the proceeds from the investment back to dollars at the prevailing spot rate of $1.52 per pound. Calculate the effective yield
Determine preferred alternative according to discounted flow : An unavoidable cost may be met by outlays of ?$90,000 now. Determine the preferred alternative according to the discounted cash flow criterion.
Disabilities education improvement act : Mr. Franklin must follow to identify Manuel for assessment according to the Individuals with Disabilities Education Improvement Act
Solve the net present value? of the contract : Solve the net present value? of the contract and determine whether the project should be accepted or rejected according to the net present value criterion.
What is the yield : Problem - Assume an investor purchased six-month commercial paper with a face value of $1 million for $940,000. What is the yield
Expert in child development : Imagine you are an expert in child development. create a comprehensive informational handbook focused on development in early childhood.
What is the investor required rate of return : A money market security that has a par value of $10,000 sells for $8,816.60. What is the investor required rate of return

Reviews

Write a Review

Financial Accounting Questions & Answers

  Prepare journal entries to revalue plant under revaluation

Larkspur Inc., a publicly listed company, Prepare the journal entries to revalue the plant under the revaluation model using the asset adjustment method.

  Compute what the initial investment was

What the initial investment was? A project with a profitability index of 1.156 also has net cash flows with a present value of $90168.

  Significant additional governance overhead costs

Sarbanes Oxley has resulted in significant additional governance overhead costs for all affected companies in addition one major change to the potential billable hours of large public accounting firms is that they can no longer provide consulting ser..

  Compute the labor efficiency variance-labor rate variance

The Stewart company reported the following results concerning this product in August. Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 9.3 pounds $8.00 per pound $74.40. Compute the materials price variance. C..

  Equivalent units of production for materials-conversion cost

The Smelting Department of Mathews Manufacturing Company has the following production and cost data for November. Compute the equivalent units of production for (a) materials and (b) conversion costs for the month of November.

  Estimated incremental revenues

Estimated incremental revenues and incremental cash operating expenses for the new processor before tax for each year are shown

  What is an estimate of Calvert price per share

Calvert's WACC is 10%, the market value of its debt and preferred stock totals $11 million, What is an estimate of Calvert price per share

  Find what is the starting salary

Assuming the first salary distribution will still occur one year from? today, what is the starting salary? (at t=1) that can be supported with your? $2,000,000

  Provide the journal entry to record the payroll tax expense

The payroll register of Heritage Co. indicates $4,200 of social security withheld. Provide the journal entry to record the payroll tax expense for the period

  Deemed-paid foreign tax credit

Mary, a U.S. citizen is the sole shareholder of CanCo, a Canadian corporation. During its first year of operations, CanCo earns $14 million of foreign-source taxable income, pays $6million of Canadian income taxes, and distributes a $2 million divide..

  What are the journal entries required during the year

What are the journal entries required during the year and at year end to properly reflect SCC's accounting for bad debt expense/allowance for doubtful accounts

  Define the stand alone principal

Define 'the stand alone principal' applying in evaluating projects and discuss the types of cash flows in project evolution. Explain in detail.

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