Considering new three-year expansion project

Assignment Help Financial Management

Reference no: EM13878609

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.97 million. 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 $2,170,000 in annual sales, with costs of $865,000. The tax rate is 35 percent and the required return on the project is 9 percent. What is the project’s NPV?

Reference no: EM13878609

Questions Cloud

Explaining the different types of money market instruments : You are hired as the Assistant Treasurer for a company. Your firm has $ 10 million in excess cash it does not plan on needing for the next six months. These funds however do include some contingency funds that are kept if unexpected funds needs arise..

Exact expected real risk premiums on the portfolio : Portfolio Returns and Deviations Consider the following information about three stocks: Rate of Return if State Occurs State of Probability of Economy State of Economy Stock A Stock B Stock C Boom .30 .20 .25 .60 Normal .45 .15 .11 .05 Bust .25 .01 −..

Distinguish between internet spoofing and email spoofing : Distinguish between Internet spoofing and email spoofing.

Identify and explain the three types of internal : Identify and explain the three types of internal source computer fraud.

Considering new three-year expansion project : Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.97 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be w..

Whom does management have a stewardship obligation : Management is held accountable to various parties, both internal and external to the business organization. To whom does management have a stewardship obligation and to whom does it have reporting responsibilities?

Write a code/program to evaluate : Write a code/program to evaluate the following arithmetic expression: X= (A - B) * ( ( ( C - D * E ) / F ) / G )

What is this projects equivalent annual cost : A five-year project has an initial fixed asset investment of $360,000, an initial NWC investment of $40,000, and an annual OCF of −$39,000. The fixed asset is fully depreciated over the life of the project and has no salvage value. If the required re..

Can you describe any other examples of cloud computing? : Both Gmail and iCloud for iTunes were mentioned as examples of cloud computing. Can you describe any other examples of cloud computing?

User Account

All Pages