Computing project net present value in given

Assignment Help Finance Basics
Reference no: EM132058430

Question: A project is expected to create operating cash flows of $26,500 a year for four years. The initial cost of the fixed assets is $62,000. These assets will be worthless at the end of the project. An additional $3,000 of net working capital will be required throughout the life of the project. What is the project's net present value if the required rate of return is 12 percent?

Reference no: EM132058430

Questions Cloud

Write about gmail application : Write about Gmail application Only write about: capabilities or features, cost to purchase and install.
Some people claim meditation has a wide range of benefits : Some people claim meditation has a wide range of benefits. What are some of the benefits that can be supported by scientific evidence?
Causative agents of meningitis : Many antibiotics that should kill the causative agents of meningitis are ineffective if given orally
Understanding financial environment of corporations : Financial ratios are employed in understanding the financial environment of corporations.
Computing project net present value in given : A project is expected to create operating cash flows of $26,500 a year for four years. The initial cost of the fixed assets is $62,000.
Calculate the average total cost per unit : During August, 8,000 units of the firm's single product were manufactured. Calculate the average total cost per unit for the 8,000 units manufactured in August
What is one way farmers are protecting the environment : What is one way farmers are protecting the environment? What is one way farmers could harm the environment?
Determine the profitability in given : A project with the following costs are under consideration to determine its profitability. Using the IRR comparison, and an annual MARR of 10%.
Explain why the ppp enzymes are highly expressed : Explain why the PPP enzymes are highly expressed in these tissues/cells?

Reviews

Write a Review

Finance Basics Questions & Answers

  Undertake the investment opportunity

a. What is the value per share of the company's stock assuming the firm does not undertake the investment opportunity?

  Why project that you have chosen might be ranked higher

Analyze the reasons why the short-term project that you have chosen might be ranked higher under NPV criterion if the cost of capital is high, while the long-term project might be deemed better if the cost of capital is low.

  Capital budgeting evaluation

Capital Budgeting Evaluation - 1.     How does a firm assess a new capital project? 2.     How would models of project evaluation such as NPV and IRR incorporate changes in economic outlook?

  Define risk tolerance and factors in setting risk tolerance

an ltl company that specializes in tourist attractions trips and stays for honeymooners is in deep financial trouble.

  Forecast horizon of five years

Using the residual income model, prepare a valuation of the common stock of Welmark Corporation as of Year 3 under the following assumptions: a. Forecast horizon of five years. b. Sales growth of 10.65% per year over the forecast horizon and 3.5% t..

  Difference between the proportion of elderly

In a random sample of 300 elderly men, 65% were married, while in a random sample of 400 elderly women, 48% were married. Which of the following is the 99% confidence interval estimate for the difference between the proportion of elderly men and t..

  Percentage of the company capital structure consists of debt

Hook Industries' capital structure consists solely of debt and common equity. It can issue debt at rd = 10%, and its common stock currently pays a $2.75.

  Review-subsidized and unsubsidized stafford loans

Time Value. Eligibility for a subsidized Stafford loan is based on current financial need. However, both subsidized and unsubsidized Stafford loans.

  What was the real hpr on the bond over the year

During a period of severe inflation a bond offered a nominal HPR of 20% per year. The inflation rate was 10% per year. What was the real HPR on the bond over.

  Does the ratio of debt to equity depend on the type

Or would you use a combination of debt and equity and in what ratio? Does the ratio of debt to equity depend on the type of business you are in?

  What amount should be used as the initial cash flow

The building cost is estimated at $1.47 million. What amount should be used as the initial cash flow for this project?

  Find a lower bound for the price

The current price of a security is 28. Given an interest rate of 5% compunded continously, find a lower bound for the price of a call option that expires in four months and has a strike of 30.

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