Depreciation is straight-line to zero over life of project

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Reference no: EM131878824

1. Joseph is purchasing a new truck for $30,000. Joseph is making a $3,000 down payment, and he will be making 48 monthly payments of $609.03 each. What is the total finance cost of this loan? (please show work)

2. Firm XXX is evaluating a project that costs $900,000, has a ten-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 50,000 units per year. Price per unit is $60, variable cost per unit is $30, and fixed costs are $500,000 per year. The tax rate is 35 percent, and we require a 12 percent return on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within ±15 percent. What are the best-case NPV and the worst-case NPV respectively?

Reference no: EM131878824

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