Calculate the npv and irr for each type of truck

Assignment Help Finance Basics
Reference no: EM131101148

Davis Industries must choose between a gas-powered and an electric-powered forklift truck for moving materials in its factory. Since both forklifts perform the same function, the firm will choose only one. (They are mutually exclusive investments.) The electric-powered truck will cost more, but it will be less expensive to operate; it will cost $22,000, whereas the gas-powered truck will cost $17,500. The cost of capital that applies to both investments is 12 percent. The life for both types of truck is estimated to be 6 years, during which time the net cash flows for the electric-powered truck will be $6,290 per year and those for the gas-powered truck will be $5,000 per year. Annual net cash flows include depreciation expenses. Calculate the NPV and IRR for each type of truck, and decide which to recommend.

Reference no: EM131101148

Questions Cloud

Write program called nprimes which takes single integer : E15: Fundamentals of Digital Systems - Fall 2010 - HOMEWORK 10. Write a program called nprimes which takes a single integer input n on the command line. It should produce as output the first n prime numbers, one on each line
What is the role of the companies creditor arrangement act : What is the role of the Companies' Creditor Arrangement Act with respect to developing contractual arrangements that fend off insolvency?
Which should actually be selected : Which project would be selected, assuming they are mutually exclusive, using each ranking method? Which should actually be selected?
How many presentation orders are possible for the first day : Three students present per day. How many presentation orders are possible for the first day?
Calculate the npv and irr for each type of truck : Annual net cash flows include depreciation expenses. Calculate the NPV and IRR for each type of truck, and decide which to recommend.
Can a homeless child including a undocumented homeless child : Can a homeless child, including an undocumented homeless child, ever be required to show residency in a district in order to enroll in a district school?
Explore the legal rights and responsibilities of the tenant : Describe whether or not Roger has a legal obligation to pay for the damage he caused and determine whether or not Larry would be liable for any direct damage.
Can we infer that differences exist between the four groups : Can we infer that differences exist between the four groups?
Calculate the npv and the irr for each project : calculate the NPV and the IRR for each project

Reviews

Write a Review

Finance Basics Questions & Answers

  There is a 1 delinquency rate for consumers with credit

there is a 1 delinquency rate for consumers with credit rating scores above 800. if umuc credit union provides large

  Time value of money comparises computing future value

Time value of money comparises computing future value of investment and Time value of money involves calculation of interest rate

  Which formula would you use to solve for the payment

which formula would you use to solve for the payment required for a car loan if you know the interest rate length of

  What is the cost of one contract

The price of a December put futures option is quoted as 5-52. Each Treasury bond futures contract is for delivery of $100,000 in Treasury bonds. What is the cost of one contract?

  Fundamental imbalance between the fiscal needs

It has often been argued that there is a fundamental imbalance between the fiscal needs of local governments and the main tax instrument (the property tax) available to them to meet those needs.

  What is the estimated per-share the value of firm z

What is the estimated per-share the value of Firm Z's common stock based on the information appearing above?

  Determine the consequences of this transaction

Your firm is cash-based. Ignore any income tax implications. Determine the consequences of this transaction for each of the following.

  Distributions-payout policy-planning-forecasting

Explain the Modigliani-Miller dividend irrelevance proposition. Discuss the different ways in which a corporation can distribute cash to its shareholders.

  What is the value of this endowment in today dollars

Assuming the cost of money is 5%, what is the value of this endowment in today's dollars? Show your work.

  Construct profit diagrams or profit tables on expiration to

construct profit diagrams or profit tables on expiration to show what position in ibm puts calls andor underlying stock

  Financial valuation-retirement plans-down-payment

Charlotte's firm had sales of $525,000 in the year ended 2000. By the year ended 2012, sales had increased to $1,200,000. What was the average annual rate of increase?

  What is capital budgeting

What is Capital budgeting and assess the conclusions we might make about the wisdom of undertaking this project

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