Evaluate the project using the IRR method

Assignment Help Finance Basics
Reference no: EM131957985

Question: Your company is considering a project which requires a $30,000 initial investment with a predicted salvage value at the end of its six year useful life of $8,000. You expect an annual return of $6,000 for the six year study period. Additionally, the equipment will require an overhaul costing $1,000 at the end of the third year. Evaluate the project using the IRR method and a MARR of 8.5%.

Reference no: EM131957985

Questions Cloud

Commissions effectiveness evaluation of audit committee : Every year, the board of directors of Northern Power, a distributor of electricity, commissions an effectiveness evaluation of its audit committee.
Which project has the higher MIRR : Your company is considering two mutually exclusive projects, X and Y, whose costs and cash flows are shown below: Year X Y 0 -$5,000 -$5,000 1 1000 4,500.
What will be the loan balance at the end of year three : A reverse mortgage is made with a balance not to exceed $300,000 on a property now valued at $700,000. What will be the loan balance at the end of year 3?
Estimate the present value of the tax benefits : Your Company is considering a new project that will require $990,000 of new equipment at the start of the project. The equipment will have a depreciable.
Evaluate the project using the IRR method : Your company is considering a project which requires a $30,000 initial investment with a predicted salvage value at the end of its six year useful life.
What is the OFC and final analysis : The company is considering operating a new driving range facility in Sanford, fl. In order to do so, they will need to purchase a ball dispensing machine.
Estimate that the equipment can be sold as salvage : A company is considering a 3-year project that requires an initial installed equipment cost of $11,000. The project engineer has estimated that the operating.
What level of pretax cost savings-MACRS schedule : A proposed cost-saving device has an installed cost of $830,000. What level of pretax cost savings do we require for this project to be profitable?
How can management eliminate or reduce agency cost : How can management eliminate or reduce this agency cost? How might management eliminate this agency cost?

Reviews

Write a Review

Finance Basics Questions & Answers

  Has the cost of workers compensation increased or decreased

has the cost of workers compensation increased or decreased in recent years? explain the factors that have led to this

  What is the projects npv if the interest rate is 6 percent

What is the project's NPV if the interest rate is 6%?

  How much is the loan worth to the lender

Consider a 30-year fixed-rate mortgage of $100,000 at a nominal rate of 9%. What is the duration of the loan? If interest rates increase to 9.5% immediately after the mortgage is made, how much is the loan worth to the lender?

  What annual savings can bloomies expect

Bloomies expects to have $11739064 in credit sales during the coming year. Currently, all checks are sent to the home office.

  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.

  Candy and i were going

Candy and I were going through the last year's financial statements (year ended 31 December 2012) and I discovered that the income tax expense account was significantly lower than the income tax the company actually paid to the Australian Taxation Of..

  Is there any advantage to investing in the stock

Suppose XYZ stock pays no dividends and has a current price of $50. The forward price for delivery in 1 year is $55. Suppose the 1-year eective annual interest rate is 10%.

  If an open-end fund as a total asset value of 11 per share

question 1 if the offering price of an open-end fund is 14 per share and the fund is sold with a front-end load of 6

  What growth rate in dividends must be expected

Common stock is currently selling for $40 per share, is expected to pay $2.00 dividend in the coming year. If investors believe that the expect rate of return is 14%, what growth rate in dividends must be expected?

  Big data in financial risk management-financial regulatory

Make a presentation of about 30 slides for the topic "use of Big Data in Financial Risk Management/ Financial Regulatory Reporting".

  Should your company purchase the dump truck

The operator costs $22.00 per hour. Using 1,000 billable hours per year determine the net present value for the purchase of the dump truck using a MARR of 18%. Should your company purchase the dump truck?

  Calculate or look up the cost of capital

Calculate or look up the cost of capital for the firm AT&T. Ideally you calculate this using the various inputs, but a good source of this information can be found at

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