Determining the npv of project-dog up franks

Assignment Help Finance Basics
Reference no: EM133062424

Dog Up! Franks is looking at a new sausage system with an installed cost of $455,000. This cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the sausage system can be scrapped for $57,000. The sausage system will save the firm $161,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $26,000. If the tax rate is 25 percent and the discount rate is 13 percent, what is the NPV of this project?

Reference no: EM133062424

Questions Cloud

What is the new statement of shareholders equity : The market value of its common stock is €135 per share, while the par value is 5€. What is the new statement of shareholders Equity
Calculate the npv for the firm : Calculate the NPV for the firm if it goes to market immediately and if it conducts customer segment research.
Discuss residency issues in relation to mr doolittle : Discuss residency and source issues in relation to Mr. Doolittle and Advise Mr. Doolittle as to whether the expenses incurred in the United Kingdom
Calculate the cost per equivalent unit : On 31s December, ending work-in-process had 1,000,000 units. Calculate the cost per equivalent unit (round amounts to two decimal places)
Determining the npv of project-dog up franks : Dog Up! Franks is looking at a new sausage system with an installed cost of $455,000. This cost will be depreciated straight-line to zero over the project's fiv
One-year treasury security : Suppose the real risk-free rate is $3.50% and the future rate of inflation is expected to be constant at 2.25%. What rate of return would you expect on a one-ye
Determining the new issue of stock : A firm's common stock is currently selling for $80 per share. The dividend expected to be paid at the end of the coming year is $5.27.
What is risk the association referring : EE considering this association is $7 million. What is risk the association referring to and what is the CVA considering this risk?
Covariance between stocks of microsoft and general mills? : Using the data in the following? table, what is the covariance between the stocks of Microsoft and General Mills??

Reviews

Write a Review

Finance Basics Questions & Answers

  Evaluate how purchasers of financial futures contracts

Evaluate how purchasers of financial futures contracts can offset their position and how their gain or loss is determined.

  Determine the operational performance metrics

Determine the operational performance metrics that you would want your model to achieve. Analyze the financial processes needed to engage in building the model

  Describe risk and explain its role in financial planning

1. describe risk and explain its role in financial planning.2. discuss the various types of

  Question regarding the project payback

Project K costs $75,000, its expected cash inflows are $11,000 per year for 7 years, and its WACC is 10%. What is the project's payback? Round your answer to two decimal places.

  Which mortgage would result in higher total payments

Condominiums usually require a monthly fee for various services. At $235 a month, how much would a homeowner pay over a 10-year period for living.

  Determination of abnormal return

AT&T announced its intent to acquire TCI. The assets of obtained in the acquisition helped create AT&T Broadband. Three years later, on Monday July 9, 2001,

  Discuss three potential issues in utilizing ratio analysis

Discuss three potential issues in utilizing ratio analysis that you would share with your colleague. In addition, calculate a liquidity, profitability, and efficiency ratio from your Week Six company to demonstrate your observations.

  What are the covariance and correlation coefficient

Suppose that the index model for stocks A and B is estimated from excess returns with the following results:

  Calculate the payment required in 16 months

Calculate the payment required in 16 months for the rescheduled option to settle the loan if money earns 5.55% compounded quarterly during the above periods.

  Analyze the long-term solvency

Analyze the long-term solvency

  Calculate the amount of the firm net fixed assets

The Caughlin Company has a long-term debt ratio of .25 and a current ratio of 1.50. Current liabilities are $900, sales are $6,230.

  Calculate the value of european call futures option

Calculate the value of a 6-month European call futures option when the futures price is $21, the strike price is $20, the risk-free rate is 12% per annum.

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