Calculate the projects apv

Assignment Help Managerial Accounting
Reference no: EM132520327

Digital Organics (DO) has the opportunity to invest $1.02 million now (t = 0) and expects after-tax returns of $620,000 in t = 1 and $720,000 in t = 2. The project will last for two years only. The appropriate cost of capital is 14% with all-equity financing, the borrowing rate is 10%, and DO will borrow $320,000 against the project. This debt must be repaid in two equal installments of $160,000 each. Assume debt tax shields have a net value of $.25 per dollar of interest paid.

Question 1: Calculate the project's APV. (Enter your answer in dollars, not millions of dollars. Do not round intermediate calculations. Round your answer to the nearest whole number.)

Reference no: EM132520327

Questions Cloud

Compute the amount of dividends received : Seaside Developments Inc. has $200,000 of no par value 4% cumulative preferred shares, Compute the amount of dividends received by the common shareholders
What are vitamins and mineral : What are vitamins and mineral? Describe each category and give examples and names for each.
What are nutrients and what are non-nutrients : What are nutrients and what are non-nutrients. Describe each and give several examples for each category, in detail.
Calculate the inventory turnover : Assume the following data for a retail business in 2013: Net sales: $640,000 and Expenses: 64,000. Calculate the inventory turnover
Calculate the projects apv : Calculate the project's APV. (Enter your answer in dollars, not millions of dollars. Do not round intermediate calculations. Round your answer)
Preapre and assign costs to customers by using abc approach : Preapre and Assign costs to customers by using an ABC approach. Round your answers and all intermediate calculations to the nearest dollar.
Evaluate pros and cons of prospective and retrospective data : Prospective data is data that is collected with a forward-looking view (the researcher sets up the methodology to recruit subjects to the study.
Apply the principles of working capital control : Demonstrate understanding of and evaluate the role of costs, cost classification and cost behaviour in the financial decision making process
Prepare schedule to determine the controlling interest share : Required - Prepare a schedule to determine the controlling interest share of the consolidated net income for 2013, 2014, and 2015

Reviews

Write a Review

Managerial Accounting Questions & Answers

  How much cost will remain in the ending inventory

how much cost will remain in the ending inventory, and how much will be transferred out of this department - Now we can use this unit cost to work through

  Compute average collection period and accounts receivable

Compute the Average collection period. (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places.)

  Analyse the applicable accounting standards

Analyse the applicable accounting standards to determine the reporting requirements under each accounting standard.

  How does e-budgeting make use of the internet

What understand how activity-based budgeting explains the logic of budgeting? How does e-budgeting make use of the Internet discuss with an example?

  Determine concerning levels and types of measurements

Determine concerning levels and types of measurements. The difference between interval and ratio levels of measurement is that interval levels have natural zero

  Prepare journal entries to record

Blanche's Boxes makes cardboard shipping cartons in a single operation.

  Cash balance on november

The cash balance on November 1 is $13500. The cash balance on November 30 will be?

  Forging department-cost per equivalent units

The following information concerns production in the Forging Department for June. All direct materials are placed into the process at the beginning of production, and conversion costs are incurred evenly throughout the process. The beginning inven..

  Develop a comprehensive analysis using npv

develop a comprehensive analysis using NPV, Payback Method, and IRR to develop a recommendation on replacing the existing equipment

  What conditions direct labor valid for allocating overhead

What is generally true about overhead allocation to high-volume products versus low-volume products under a traditional costing system?

  Abc consultants works for only two clients

ABC Consultants works for only two clients: a large, for profit corporation and a small environmental not for profit agency.

  How a time driven abc cost system can be implemented

Include a cover page containing the title of the assignment, the student's name, the professor's name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

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