Compute what is the project npv

Assignment Help Financial Accounting
Reference no: EM132490699

Point 1: DeVault Services recently hired you as a consultant to help with its capital budgeting process. The company is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated by the straight-line method over its 3-year life, and would have a zero salvage value. No new working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life.

Question 1: What is the project's NPV?

Risk-adjusted cost of capital                     10.0%

Net investment cost (depreciable basis)     $65,000

Straight-line deprec. rate                      33.3333%

Sales revenues, each year                        $65,500

Operating costs (excl. deprec.), each year     $25,000

Tax rate                                                      25.0%

Reference no: EM132490699

Questions Cloud

Sketch the mode which has two nodes between the plates : A standing-wave interference pattern is set up by electromagnetic waves between two metal sheets 2.00 m apart.
Prepare journal entries for income tax : Prepare journal entries for income tax for 2019 to 2023. Assume that losses are carried back, where applicable. It is more likely than not that the company
What is the year one cash flow for the project : VR Corporation has the opportunity to invest in a new project, the details of which are shown below. What is the Year 1 cash flow for the project?
Maternity case - brenda patton : Document your initial assessment data of Ms. Patton, including uterine activity (frequency and duration), fetal heart rate (FHR) activity
Compute what is the project npv : No new working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's
What is tvm : What is TVM? What are some of the assumptions behind the TVM calculations? How do these assumptions limit our application of these calculations?
What is the year one cash flow : You have just landed an internship in the CFO's office of Hawkesworth Inc. Your first task is to estimate the Year 1 cash flow for a project
What is business risk : Using the free cash flow valuation model, show the only avenues by which capital structure can affect value. What is business risk? What factors influence.
What is the height of the tower : The student's ball takes one-quarter of the time of the dropped ball. What is the height of the tower?

Reviews

Write a Review

Financial Accounting Questions & Answers

  What does your company call its balance sheet

Also define liquidity and solvency as it relates to the company's debt-paying ability. What does your company call its ‘Balance Sheet'?

  Compute new price of bond

Media bias issued bonds 10 years ago at $1000 per bond. bonds had a 40 year life when issued and the annual interest was 12%. compute new price of bond.

  Calculate operating income under absorption costing

ABC Company sells 10,000 units of a product at $30 per unit. This is the first year of operations so there is no beginning inventory of finished units. Calculate operating income under absorption costing. Calculate operating income under variable cos..

  Direct amp indirect cost classification fixed amp variable

direct amp indirect cost classification fixed amp variable cost classification.whippany manufacturing wants to estimate

  Show the perpetual inventory system

Journalize the transactions for the month of June for Goldenrod Warehouse, using a perpetual inventory system

  Interest expense for the first semiannual interest period

A company issued 5-year, 6% bonds with a par value of $97,000. The company received $94,947 for the bonds. Using the straight-line method, the amount of interest expense for the first semiannual interest period is

  Journal entries of merchandise purchase on account1 3302009

journal entries of merchandise purchase on account.1. 3302009 sold 1700000 merchandise inventory on account.nbsp all

  What is the machines net present value

Rayburn Industries is evaluating the investment of $132,700 in a new packing machine that should provide annual cash operating inflows of $28,460 for6 years. At the end of 6 years, the packing machine will be sold for $4,740. Rayburn’s required rate ..

  Disclosure of the balance sheet after the dividend issue

disclosure of the balance sheet after the dividend issue and stock split.on january 1 2007 frederiksen inc.stockhlders

  Prepare correcting general journal entries

Prepare correcting general journal entries required at December 31, 2013 assuming that books have not been closed -Determine the proper balance in Allowance

  Investing activities as a source of funds

In operating activities as a source of funds-In investing activities as a source of funds-In investing activities as a use of funds.

  Identify events that result in revenue-expense recognation

Valmont Inc. experienced the following events in 2014, its first year of operation: Received $50,000 cash from the issue of common stock. Performed services on account fot $67,000. Identify the events that result in revenue or expense recognition and..

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