Demonstrate what is the npv of the project

Assignment Help Financial Accounting
Reference no: EM132538441

Question 1: WINKA Corp. has been considering the purchase of a new manufacturing facility for $500,000. The facility is to be depreciated on a straight line basis over 20 years. It is expected to have no value after those 20 years. Cash flows from depreciation are considered to be risk-free and so they should be discounted at the risk-free rate. Operating revenues from the facility are expected to be $100,000 during the first year. The revenues are expected to increase at the rate of 2.2% per year which is also expected to be the inflation rate. Production costs in the first year are $25,000, and they are expected to remain constant each year. The project ends after 20 years. WINKA Corp cost of capital is 12.5%. Its corporate tax rate is 21%. The risk-free rate is 3%. What is the NPV of this project?

Reference no: EM132538441

Questions Cloud

What is the present value today of the future payment : Suppose that receive a payment of $80,000 in three years. If interest rates are 2%, then what is the present value today of the future payment?
Innovation contribute to sales growth of apple : Research on questions like how does innovation contribute to sales growth of apple - What types of innovation contribute to sales growth of apple
Simple interest at an annual rate : A discounted note that pays $24500 in 6 months sells for X. Find X in each of the following interest rate scenarios:
Understanding the political and legal environment : Understanding the cultural environment. Understanding the political and legal environment.
Demonstrate what is the npv of the project : The project ends after 20 years. WINKA Corp cost of capital is 12.5%. Its corporate tax rate is 21%. The risk-free rate is 3%. What is the NPV of this project?
Make reference to the revenue recognition criteria : Provide reasons - make reference to the revenue recognition criteria we discussed in class. If disagree, determine the amount of revenue
Examine importance of professional associations in nursing : Examine the importance of professional associations in nursing. Choose a professional nursing organization that relates to your specialty area (psychiatric).
Global strategy and management : What would be a common list of issues you should be taught about, if you were about to be sent to a foreign country to conduct business?
How you will ensure your research is conducted : Explain how you will ensure your research is conducted in an ethical manner. Include a copy of an informed consent that will be included for participants.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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