Calculate the npv of project

Assignment Help Finance Basics
Reference no: EM132724210

Caradoc Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $423,000 is estimated to result in $163,000 in annual pre-tax cost savings. The press falls into Class 8 for CCA purposes (CCA rate of 20% per year), and it will have a salvage value at the end of the project of $56,300. The press also requires an initial investment in spare parts inventory of $33,000, along with an additional $4,400 in inventory for each succeeding year of the project. If the shop's tax rate is 35% and its discount rate is 9%.

Calculate the NPV of this project. (Do not round your intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.)

NPV $

Should the company buy and install the machine press?

multiple choice

-Yes

-No

Reference no: EM132724210

Questions Cloud

Explain one potential challenge for each client : Brief description of the two clients whom you selected and whether each has a chemical (physical) or behavioral (psychological) addiction.
Compare five differences between the generations : Research the various generations: baby boomers, Generation X, and the Y Generation (millennials). Compare and contrast five differences between the generations
What is project equivalent annual cost : A five-year project has an initial fixed asset investment of $305,000, an initial NWC investment of $29,000, and an annual OCF of -$28,000.
Explain differences chemical vs behavioral addictions : Explain any insights you gained as a result of analyzing the similarities and differences between chemical and behavioral addictions.
Calculate the npv of project : Caradoc Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $423,000 is estimated
Why think intervention is appropriate for jake : Identify two factors that you believe are necessary for the successful implementation of the evidence-based practice and explain why.
Case Study - Human Resource Planning : Case Study - Human Resource Planning and Virtual Human Resource Management - What specialized skills will the future HRIS professional need
Identify the symptoms or red flags : Diagnostic Labels as Powerful Communications,Identify the symptoms or "red flags" in the case study that may be evaluated for a possible mental health disorder.
Describe the sociological theory : Describe the sociological theory that you think best explains criminal behavior and explain why, using specific examples from the resources or the literature

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the after tax cash flow in year 15

1) What is the after tax operating cash flow in years 11 through 14? 2) What is the after tax cash flow in year 15?

  Determine the present values if 5000 is received in the

determine the present values if 5000 is received in the future i.e.at the end of each indicated time period in each of

  Explain the four stages of organisational change

Explain the four (4) stages of organisational change?

  Compute the monthly payments for an add-on interest loan

Compute the monthly payments for an add-on interest loan of $2,000, with an annual interest rate of 18 percent and a term of 3 years. Round to the nearest cent as needed.

  Determine the value of the company today

Barrett Corporations invests a large sum of money in R&D; as a result, it retains and reinvests all of its receiving. Barrett does not pay any dividends and it has no plans to pay dividends in the near future.

  Pdq corp has sales of 4000000 the firms cost of goods sold

pdq corp. has sales of 4000000 the firms cost of goods sold is 2500000 and its total operating expenses are 600000. the

  Calculate the cost per procedure using job order costing

ABC Diagnostic Center is developing an RVU and product cost for the following CT procedures, given the projected volumes and sample direct costs.

  Problem regarding the beggar v chooser

Summarize the legally relevant facts but not all facts unless used by the court in deciding the case. For example, do not include dates (or day of the week) unless this is relevant to the decision.

  Compute the cost of shares-amount of commission

Compute the cost of shares, amount of commission, and total amount paid to the stockbroker in these round-lot transactions.

  Solve for the minimum variance portfolio

Solve for the minimum variance portfolio (i.e., what are the weights in A and B of the minimum variance portfolio). What is the variance of this portfolio?

  What is booth additional funds needed for the coming year

Additional Funds Needed The Booth Company's sales are forecasted to double from $1,000 in 2012 to $2,000 in 2013. Here is the December 31, 2012.

  Present value and shareholder wealth maximization

What is the relationship between the concepts of net present value and shareholder wealth maximization?

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