Evaluating a project for the tiff-any golf club

Assignment Help Financial Management

Reference no: EM131065311

You are evaluating a project for The Tiff-any golf club, guaranteed to correct that nasty slice. You estimate the sales price of The Tiff-any to be $490 per unit and sales volume to be 1,000 units in year 1; 900 units in year 2; and 1,325 units in year 3. The project has a 3-year life. Variable costs amount to $270 per unit and fixed costs are $100,000 per year. The project requires an initial investment of $192,000 in assets, which will be depreciated straight-line to zero over the 3-year project life. The actual market value of these assets at the end of year 3 is expected to be $44,000. NWC requirements at the beginning of each year will be approximately 20 percent of the projected sales during the coming year. The tax rate is 34 percent and the required return on the project is 10 percent. What change in NWC occurs at the end of year 1?

Reference no: EM131065311

Questions Cloud

What is total cost of this option excluding material cost : A form of level production where the total number of disk units needed during the year are produced during the year. What is the total cost of this option, excluding the material cost

Proposed project requires an initial cash outlay : A proposed project requires an initial cash outlay of $749,000 for equipment and an additional cash outlay of $48,500 in year one to cover operating costs. During years 2 through 4, the project will generate cash inflows of $354,000 a year. What is t..

Describe built-in functions in c++ : Describe Built-in Functions in C++

What is the principal repayment amount : You need $11,000 to purchase a used car. Your wealthy uncle is willing to lend you the money as an amortized loan. He would like you to make annual payments for 5 years, with the first payment to be made one year from today. He requires a 6% annual r..

Evaluating a project for the tiff-any golf club : You are evaluating a project for The Tiff-any golf club, guaranteed to correct that nasty slice. You estimate the sales price of The Tiff-any to be $490 per unit and sales volume to be 1,000 units in year 1; 900 units in year 2; and 1,325 units in ye..

Find a 90% confidence interval for the average number : Assuming that the confidence level remains constant, what sample size is needed to reduce by half the margin of error of the confidence interval in part (a)?

Total cost of building-calculate amount of interest expense : On January 1, 2016, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2017. What is the total cost of the building? Calculate the amount of interest exp..

Provide the value of the objective function and the variable : Using any linear programming software, solve the problem for the optimal answer and provide the value of the objective function and the variables at optimality. Provide a copy of your linear programming output. In addition to providing this output..

What is a typical amount of miles traveled : Draw a cumulative frequency distribution. Forty percent of the buses were driven fewer than how many miles? How many buses were driven less than 850 miles?

User Account

All Pages