Discount rate the firm wants to use for the project

Assignment Help Financial Management

Reference no: EM132050598

GDebi Enterprises is thinking of building a chemical processing plant to produce 4-hydroxy-3-methoxybenzaldehyde. The firm estimates that the initial cost of the project will be $12.1 million, and the plant will produce cash inflows of $6.9 million for the next 5 years, after which time the project will terminate. In the 6th year however, the firm will need to clean up the site, which it estimates will cost it $3 million. The discount rate the firm wants to use for the project is 14.9 percent. What is the NPV of this project? (Enter answer in millions.)

Reference no: EM132050598

Questions Cloud

Defines given phases and give a thorough example : Your state has a forthcoming referendum concerning no smoking in public places including bars and restaurants. Follow the ten steps on negotiation planning.

What is the company cost of preferred stock : What is the company's cost of preferred stock for use in calculating the WACC?

What is the duration of the portfolio : What is the composition and duration of the new portfolio? What is the duration of the portfolio?

What is the beta of the stock : ?Suppose the covariance between the returns of the stock GHI and the returns to the market is 0.00080 and the standard deviation of market returns is 0.021.

Discount rate the firm wants to use for the project : The discount rate the firm wants to use for the project is 14.9 percent. What is the NPV of this project?

What are the tax consequences on the dividends : What are the tax consequences on the dividends after the first year if Joe is in the 33% marginal tax bracket?

Discuss the fed current monetary policy : Discuss the Fed's current monetary policy and its implications. The response must be typed, single spaced, must be in times new roman font (size 12).

Rate of return on similar investments : What is one share of this stock worth to you if you require a 10% rate of return on similar investments?

Accounting can affect the formation of portfolios : Carefully explain how mental accounting can affect the formation of portfolios.

User Account

All Pages