Compute the npv of the project

Assignment Help Financial Management

Reference no: EM131337317

Project Alpha offers the following net cash flows following an initial (year 0), certain outlay (NINV) of $70,000:

Year	Net Cash Flow	Certainty Equivalent Factor
1	$30,000	0.91
2	30,000	0.79
3	30,000	0.65
4	20,000	0.52
5	20,000	0.40
6	10,000	0.30

a. Compute the NPV of this project at a 17 percent cost of capital.

b. If the risk-free rate is 8 percent, what is the certainty equivalent NPV for project Alpha?

Reference no: EM131337317

Questions Cloud

Nonclinical applications of emerging technology : Describe two nonclinical applications of emerging technology designed to support communication with remote satellite facilities.

Justify the uniform plate temperature assumption : Compute and plot the corresponding variations in the convection and radiation heat transfer rates.

Hadco construction preventive maintenance strategy : Hadco Construction is a major contractor for large-scale residential, commercial and government projects. It operates a fleet of heavy duty construction equipment, for which repair and maintenance are major costs.

Calculating projected net income : A proposed new investment has projected sales of $829,000. Variable costs are 53 percent of sales, and fixed costs are $187,230; depreciation is $93,000. Assume a tax rate of 30 percent. What is the projected net income?

Compute the npv of the project : Compute the NPV of this project at a 17 percent cost of capital.- If the risk-free rate is 8 percent, what is the certainty equivalent NPV for project Alpha?

How you would like to brand their and why : Make sure that you give me some background as to what the company sells and who you are trying to reach, your campaign should target that audience. Think of this as a pitch to the customer as to how you would like to brand their and why.

What is the value of its tax shields : Hastings Corporation is interested in acquiring Vandell Corporation. Vandell has 1 million shares outstanding and a target capital structure consisting of 30% debt. What is the per share value of Vandell to Hastings Corporation? What is the value of ..

What is the initial rate of heat transfer from one of plates : For the prescribed plate dimensions and initial temperature, as well as the prescribed air temperature, what is the initial rate of heat transfer from one of the plates?

Implementation process begins : Why is it important for an organization to identify the areas it wishes to measure before the implementation process begins? Provide an example of a company that had clear measurement guidelines in place before implementing its strategic plan.

User Account

All Pages