Estimate what is the net present value

Assignment Help Financial Accounting
Reference no: EM132553648

Question 1: The Market Place is considering a new four-year expansion project that requires an initial fixed asset investment of $1.67 million. The fixed asset will be depreciated straight-line to zero over its four-year tax life, after which time it will have a market value of $435,000. The project requires an initial investment in net working capital of $198,000, all of which will be recovered at the end of the project. The project is estimated to generate $1,850,000 in annual sales, with costs of $1,038,000. The tax rate is 21 % and the required return for the project is 16.4 %. What is the net present value?

A) $451,180.73

B) $254,595.45

C) $358,576.22

D) $302,208.15

E) $241,334.55

Reference no: EM132553648

Questions Cloud

What is the mass of the footing in kilograms : A concrete footing measures 3.0 ft by 3.0 ft by 2.0 ft. If the density of the concrete is 3.0 g/cm3
The documentary is merely springboard for ideas : The documentary is merely a springboard for ideas - do not use it as fact or rely on the conclusions without researching all sides yourself.
Evaluate the industry and market : Provide a little background on your business venture and evaluate the industry and market.
Calculate the ph of the solution : Calculate the change in pH if 0.001 mol of NaOH is added to 1.00 L of pure water.
Estimate what is the net present value : $1,850,000 in annual sales, with costs of $1,038,000. The tax rate is 21 % and the required return for the project is 16.4 %. What is the net present value?
What is your driving factor for starting your business : What's your driving factor for starting your business? What's your purpose for doing so? What's your mission and vision?
What is the current stock price according to constant growth : Required rate of return of 11.29 percent, what is the current stock price according to the constant growth dividend model? Round the answer to two decimal place
Potential attorney to represent your business : Develop at least 5 open-ended questions to ask a potential attorney to represent your business
What project NPV using a discount rate of seven percent : Big Steve's, makers of swizzle sticks, What is the project's NPV using a discount rate of 16 percent? Should the project be accepted? Why or why not?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Explain the main ethical dilemmas in the case study

Briefly explain the main ethical dilemmas in the case study and compare and contrast the utilitarian, libertarian, deontological and virtue ethics perspectives on the dilemma(s) you have identified.

  Narrow application of management accounting

The narrow application of management accounting that deals with costing products is known as:

  Create journal entry necessary to account for mjr investment

Create the journal entries necessary to account for the MJR investment, assuming that CMC has significant influence over the operating

  What was the value of the inventory

A company had inventory on November 1, of 5 units at a cost of $10 each. OnNovember 2, they purchased 19 units at $12 each. On November 6, they purchased15 units at $15 each. On November 8, 17 units were sold for $45 each. Using theLIFO perpetual inv..

  Amarua corp is required to deposit money

Amarua Corp is required to deposit money in a bank to retire a bond issue of $10 million paying its bondholders a coupon rate of 6%. The bank is currently paying 8% on deposited funds.

  Evaluate the gregson absorption costing gross margin

Evaluate the Gregson absorption costing gross margin and profit and Gregson variable contribution margin and profit?

  Make the 2019 year-end statement of cash flows

Make the 2019 year-end statement of cash flows for Kia Company. (Cash outflows should be indicated with a minus sign.)

  Various functions performed by the financial intermediaries

Explain in Detail the various functions performed by the financial intermediaries in the financial market.

  Immaterial transactions to minimize the effect on output

Normally, auditors using the ITF technique enter immaterial transactions to minimize the effect on output.

  What is the nominal compound interest rate

A bank is offering a loan with an effective interest rate of 12%. It is compounded twice each month, what is the nominal compound interest rate are offering

  After-tax yield on the bonds

John Doe is in the 40 percent personal tax bracket. He is considering investing in HCA bonds that carry a 12 percent interest rate.

  Is bradburns desire to finance the plant expansion

Assume that the percentage changes experienced in fiscal year 2015 as compared with fiscal year 2014 for sales. Is Bradburn's desire to finance the plant expansion from internally generated funds realistic? Discuss.

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