Considering new three-year expansion project

Assignment Help Financial Management

Reference no: EM131309748

H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,490,000. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $2,280,000 in annual sales, with costs of $1,270,000. Assume the tax rate is 30 percent and the required return on the project is 8 percent. What is the project’s NPV?

Reference no: EM131309748

Questions Cloud

What are the net cash flows of the project each year : H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,250,000. The fixed asset will be depreciated straight-line to zero over its three-year tax life. The project is estimated to gen..

How many people do you need to participate in the study : If you wanted the 95% confidence interval for the mean number of medical conditions for that group to be no wider than 3 medical conditions, and you use a standard deviation of 4.0, how many people do you need to participate in the study who would..

What is you profit or loss on the contract if premium : If you buy a put option on a $100,000 dollar Treasury Bond futures contract with an exercise price of 95 and the price of the Treasury Bond is 120 at expiration, is the contract in the money, out of the money, or at the money? What is you profit or l..

When did the bulk of the data get transmitted : When did the bulk of the data get transmitted? What caused this transmission spike? Were any ISP sites accessed? If so which ones? What accounts?

Considering new three-year expansion project : H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,490,000. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be wor..

Could a religious employee ever be considered a hindrance : What aspects of religions or belief systems may come into play in the workplace?What aspects of a religion or belief system would be helpful to know when managing a person with this particular set of beliefs?How would you managed a situation where a..

What is the capital gains yield : You are an investor in company which is an auto parts supplier. They will pay a dividend next year of $0.80 per share and are expected to grow at an annual rate of 2%. The price of the stock is currently $37.24. What is the capital gains yield?

Considering the sale of new sound board : Rolston Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $26,900, and the company expects to sell 1,540 per year. The company currently sells 2,040 units of its existing model per year..

How investors see the long-term viability of an organization : Do these regulations and reports have an impact on how investors see the long-term viability of an organization or company in which they plan to invest?

User Account

All Pages