Calculate the npv of the project-mustang enterprises

Assignment Help Risk Management
Reference no: EM132528632

Mustang Enterprises, Inc., has been considering the purchase of a new manufacturing facility for $289,000. The facility is to be fully depreciated on a straight-line basis over seven years. It is expected to have no resale value after the seven years. Operating revenues from the facility are expected to be $124,000, in nominal terms, at the end of the first year. The revenues are expected to increase at the inflation rate of 3 percent. Production costs at the end of the first year will be $49,000, in nominal terms, and they are expected to increase at 4 percent per year. The real discount rate is 6 percent. The corporate tax rate is 34 percent.

Calculate the NPV of the project.

Reference no: EM132528632

Questions Cloud

Development and implementation of a mobile application : Prepare presentation slides to present the research topic with proper in-text citations and references.
Calculate the npv of the project-mustang enterprises : Mustang Enterprises, Inc., has been considering the purchase of a new manufacturing facility for $289,000. The facility is to be fully depreciated on a straight
Organization security system : Recognizing the fact usernames passwords are the weakest link in an organization's security system because username and password are shareable,
How much debt will be issued next year : What would be the maximum possible growth rate if the firm did not issue any debt next year? how much debt will be issued next year?
Calculate the npv of the project-mustang enterprises : Mustang Enterprises, Inc., has been considering the purchase of a new manufacturing facility for $289,000. The facility is to be fully depreciated on a straight
Should wc rent the additional machine : The marketing dept believes it can sell additional 500 units but market price for premium coolers drop to 280 per unit. Should WC rent the additional machine?
Prepare a report explaining the reasons : Prepare a report explaining the reasons for the present pathetic situation, the strategies to overcome this situation and to enhance exports, appreciate
Find the corn futures price : Find the corn futures price. Assume that the storage costs are paid at the end of the year and that the risk-free rate is 5% per annum.
Cybercrime-cybersecurity and financial institutions : These institutions are often among the first to be affected by Cybercrime and Cybersecurity issues

Reviews

Write a Review

Risk Management Questions & Answers

  A project report on mutual funds

This project report speaks of the core and future aspects of Mutual Funds and the present challenges to cope with.

  Evalaute the theoretical option price

Evalaute the theoretical option price

  Risk and return

Investing in the stock market and Risk-free investment and inflation

  Evaluate the gross profit

Evaluate the gross profit

  Discuss concepts of risk and management

Risk lies at all levels of business activity. There are many different kinds of risks within an management as well as ways to manage risks.

  Determine the average risk premium

Here are stock market & Treasury bill percentage (%) returns between 2006 and 2010: Determine the average risk premium

  Hypothetical healthcare organization ratios

Discuss and explain why one should apply caution when using financial ratios for analyzing a healthcare management's current financial position and future viability.

  Discuss role of risk assessment

The financial information has been dominated currently by stories of financial institutions that have mis-measured risk as part of subprime mortgage crisis.

  Calculate maturity risk premium

The real risk-free rate is 3 percent, & inflation is expected to be 3 percent for the next two years. A 2-year Treasury security yields 6.3 percent.

  Selcting best option for portfolio

Suppose you are planning investing in two stocks to form a portfolio. Assume you do not like risk. Which one of given stock combinations will you select for your portfolio?

  Result of systematic or unsystematic risk

It has been a little over one year since the collapse of Lehman Brothers which was the first major event in the downturn of our stock market & economy.

  Determine risk management

Determine risk management? Discuss the importance of risk management in an organization? How does risk management mitigation create value for an organization?

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