Depreciation is straight-line to zero over life of project

Assignment Help Financial Management

Reference no: EM13937606

We are evaluating a project that costs $1034668, has a seven-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 43281 units per year. Price per unit is $53, variable cost per unit is $23, and fixed costs are $820621 per year. The tax rate is 39 percent, and we require a 10 percent return on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within +/-9 percent.

What is the NPV of the project in worst-case scenario?

Reference no: EM13937606

Questions Cloud

Business environment in global context : 1. What factors are likely to contribute towards a relative decline in US world influence in the coming years? 2. To what extent do you think this decline is inevitable?

Facilities for undergraduate students : We should write Main hypothesis related to subhypothesis which are: 1) The student's Union provides more facilities for undergraduate students more than postgraduate students.

Show each transaction in the accounting equation : Show each transaction in the accounting equation. Prepare the contributed capital portion of the shareholders' equity section at June 30, 2007.

Based on your analysis should the project be accepted : Find the net present value, internal rate of return, payback period, discounted payback period, and profitability index of the proposed project. Based on your analysis should the project be accepted?

Depreciation is straight-line to zero over life of project : We are evaluating a project that costs $1034668, has a seven-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 43281 units per year. What is the NPV of the proj..

Develop a c++ program to solve the problem : If an attempted debit transaction cannot be completed successfully (because there is not enough cash available), an error message should be displayed instead.

Review about teaching english language in libya : Write a literature review about teaching English language in Libya.

How would stock dividend be shown in the accounting equation : How would the stock dividend be shown in the accounting equation? How many shares of stock are outstanding after the stock dividend?

Nature of contemporary business : a) Demonstrate an understanding of the nature of contemporary business and business activities and operations

User Account

All Pages