Calculate the range for the npv given each scenario

Assignment Help Finance Basics

Reference no: EM13290096

Birkenstock is considering an investment in a nylon-knitting machine. The machine requires an initial investment of $25,000, has a 5-year life, and has no residual value at the end of the 5 years. The company's cost of capital is 12%. Known with less certainty are the actual after-tax cash inflows for each of the 5 years. The company has estimated expected cash inflows for three scenarios: pessimistic, most likely, and optimistic. These expected cash inflows are listed in the following table. Calculate the range for the NPV given each scenario.

Expected Cash inflows

Year Pessimistic Most likely Optimistic
1 $5,000 8,000 10,500
2 6,000 9,000 12,000
3 7,500 10,500 14,500
4 6,500 9,500 11,500
5 4,500 6,500 7,500

Reference no: EM13290096

Questions Cloud

Describe the structure of the world wide web : Describe the structure of the World Wide Web as interconnected hypertext documents and create and validate HTML documents - create presentations using Cascading Style Sheets and DHTML.

What minimum amount of annual cash inflow : What minimum amount of annual cash inflow do you need if your firm has an 8% cost of capital? If the project is forecast to earn $12,500 per year over the 5 years, what is its IRR? Is the project acceptable?

Explain how many grams of each of the following substances : How many grams of each of the following substances will dissolve in 100 mL of cold water. Consult a handbook or the Internet and cite your source.

How far has the car moved : You are traveling in a convertible with the top down. How far has the car moved when you get a chance to catch the tomato

Calculate the range for the npv given each scenario : The company has estimated expected cash inflows for three scenarios: pessimistic, most likely, and optimistic. These expected cash inflows are listed in the following table. Calculate the range for the NPV given each scenario.

Explain the mono-nitration of phenyl methyl ketone : Can anyone help me with the reaction sequence AND stepwise mechanism for the mono-nitration of phenyl methyl ketone

Find the magnitude and direction of his average acceleration : A football player carrying the ball runs straight ahead at the line of scrimmage and directly into a wall of defensive linemen. Find the magnitude and direction of his average acceleration

Find behavior of transfer function at resonate frequency : Given a zero-pole diagram of a transfer function. Find the behavior of the transfer function at resonate frequency and find out whatthe resonant frequency.

Find the speed of the water coming out of the nozzle : water travels through a 9.6 cm diameter fire hose with a speed of 1.3 m/s. At the end of the hose, find the speed of the water coming out of the nozzle

User Account

All Pages