Calculate the project irr and npv

Assignment Help Financial Management

Reference no: EM132023437

A firm is considering purchasing a new piece of equipment for $200,000 that will be depreciated using straight line depreciation to a salvage value of zero over its four-year projected life. It is projected that the equipment would lead to an increase in EBIT of $70,000 each year (years 1- 4). Calculate the project's IRR and NPV assuming an 11% required rate of return and a tax rate of 30%, and indicate whether the project should be accepted.

Reference no: EM132023437

Questions Cloud

Considering either leasing or buying some new farm equipment : Green Valley Farms is considering either leasing or buying some new farm equipment, What is the net advantage to leasing (ie, NPV for leasing over buying)?

Organization product mix includes all of products its sell : The first step in pricing a service is to define the unit of service consumption. An organization's product mix includes all of the products it sells.

Inputs that are primarily determined in dollars : Suppose the company is a multinational firm with sales in Japan and inputs that are primarily determined in dollars. How should this affect its financing choice

Used as the initial cash flow for this project : The building cost is estimated at $1.47 million. What amount should be used as the initial cash flow for this project?

Calculate the project irr and npv : Calculate the project's IRR and NPV assuming an 11% required rate of return and a tax rate of 30%,

What is the maximum price of bond : What is the maximum price of a bond? Assume that yields cannot be negative.

What is the dirty or full price of a bond : What is the "dirty" or "full" price of a bond?

How much will the portfolio manager : How much will the portfolio manager have if she holds the bond until it matures eight years from now,

How would you approach the development of a training program : How would you approach the development of a training program to address management's deficiencies? For the purpose of this assignment.

User Account

All Pages