Solution-Compute the net present value of Project B

Compute the net present value of Project B

Assignment Help Managerial Accounting

Reference no: EM132917221

Question - Perit Industries has $180,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are:

	Project A	Project B
Cost of equipment required	$180,000	$0
Working capital investment required	$0	$180,000
Annual cash inflows	$32,000	$54,000
Salvage value of equipment in six years	$9,300	$0
Life of the project	6 years	6 years

The working capital needed for project B will be released at the end of six years for investment elsewhere. Perit Industries' discount rate is 15%.

Required - Compute the net present value of Project B.

Reference no: EM132917221

Questions Cloud

Increase services and amenities to community : This expansion will allow us to increase services and amenities to the community and to our visitors.

Prepare journal entries : The machine has estimated useful life of 10 years and will depreciated on declining balance basis at double the straight-line rate. Prepare journal entries

What was the original annual rate of return : What was the original annual rate of return needed to reach your goal when you started the fund two years ago

Most financial statement : What new information did you learn about the company? Were any financing decisions discussed?

Compute the net present value of Project B : The working capital needed for project B will be released at the end of six years for investment elsewhere. Compute the net present value of Project B

How big of a loan amount can you afford : You've found a 3 year loan at 2.3% annual interest rate, compounded monthly. How big of a loan amount can you afford

Leveraging proprietary data for analytical advantage : What could be an example of an organization Leveraging Proprietary Data for Analytical Advantage?

What is the minimum saving in annual operating costs : What is the minimum saving in annual operating costs that must be achieved in order for the president to consider buying the new machine

Calculate NOPAT, invested capital, and ROI : Paver Mills is a division of Iowa Woolen Products. For the most recent year, Paver had net income of $21,600,000. Calculate NOPAT, invested capital, and ROI

User Account

All Pages

Compute the net present value of Project B

Reference no: EM132917221

Reference no: EM132917221

Questions Cloud

Reviews

Write a Review

Managerial Accounting Questions & Answers

Manage budgets and financial plans

Prepare a retained earnings statement

Prepare a master budget for the three-month period

Construct the companys direct labor budget

Evaluate the predetermined overhead rate

Determine the company''s bid

Compute the pool rates for the different activities

Prepare Company financial statements

Prepare an analysis of terracycles

Discuss the ethical issues

Political resources in emerging markets

Management accounting - ehsan electronics company

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT