Find the npv of the facility-is it economically feasible

Assignment Help Financial Management
Reference no: EM132055608

You are working as an economist for the city of Portland. Suppose Portland is hoping to get an NHL team, and they compete with Seattle to attract the relocating Arizona Coyotes. Portland’s demand function for NHL tickets is : P = 200 – 0.002Q Seattle’s demand function for NHL tickets is: P = 300 – 0.002Q. d. Suppose Portland offers to partly sponsor an entirely new facility for the AZ Coyotes. iii. Suppose the initial construction cost for a temporary facility is $35 mln. The useful economic life of the new ballpark is 5 years, and the appropriate discount rate is 10%. Assume that the expected operating profit is $10 mln a year. Find the NPV of the facility. Is it economically feasible?

Reference no: EM132055608

Questions Cloud

What caused the great depression : How did Franklin Roosevelt and the American people react to the rise of fascism and militarism in Europe and Asia?
Estimating company cost of capital requires : Estimating a company's cost of capital requires. What is the dollar amount of your investment in Stock D?
What is the required rate of return of the common stock : The common stock has a market value of $50 per share with 100,000,000 shares outstanding. If the growth rate is 6% per annum and the earnings are $ 4 per share.
What will be the amount in the fund on december : Hope Dearborn invests $40,000 on January 1, 2016, What will be the amount in the fund on December 31, 2021
Find the npv of the facility-is it economically feasible : Assume that the expected operating profit is $10 mln a year. Find the NPV of the facility. Is it economically feasible?
Bacterial concentration in the original : What was the bacterial concentration (per mL) in the original, undiluted suspension?
Why did some americans object to wilsons fourteen points : Do you think World War One represented a significant turning-point in United States' approach to foreign intervention? Why or why not?
What would be the cost of new equity : Cost of Common Equity with Flotation Banyan Co.'s common stock currently sells for $47.50 per share. The growth rate is a constant 10.4%, and the company.
Absence of th-b cell interaction : Identify the antibody or antibodies that meet each of the following:

Reviews

Write a Review

Financial Management Questions & Answers

  How much will you pay for a share today

If you require a return of 11 percent on the company's stock, how much will you pay for a share today?

  Different types of mutual funds that mutual fund companies

Briefly discuss different types of mutual funds that mutual fund companies offer including: (1) index funds, (2) actively managed diversified funds.

  What is the stock price for each company

Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $3.30 next year. The growth rate in dividends for all three companies is 5 percent. The required return for each company’s stock is 7 percent, 10 percent, and 13 percent, respectiv..

  Short term financial planning for the pdc company

Short term financial planning for the pdc company was described earlier in this chapter. refer to the pdc company projected monthly operating schedule.

  Proposed expansion of an existing subsidiary

You are evaluating a proposed expansion of an existing subsidiary located in Switzerland. The cost of the expansion would be Fr 15 million. The cash flows from the project would be Fr 4.1 million per year for the next five years. What is the NPV in d..

  Estimate the expected return on the stock market next year

Explain why the estimate in part (a) may be better than simply assuming that next year's stock market return will equal the long-term average return.

  Interest and leave the account unmolested

If you invest $3,377 today in an account earning 15.12% interest and leave the account unmolested for 35 years; how much will be in the account at the end of the 35 years?

  Who were your role models as you were growing up

Review your life history. What are the major events in your life? How did these events make you the person you are right now?

  Tax-deductible causes

Approximately $1800 in property taxes for their house and cars, $2400 in state income taxes, and donate $500 to tax-deductible causes.

  Take today in order to hedge against GBP exchange rate risk

Suppose you receive 2,500,000 British Pounds (not Euros) today and plan to convert into US dollars early next February. Which is the correct action to take today in order to hedge against GBP exchange rate risk?

  The sale of ibm computers in france will be recorded

The contract size for one euro futures is 125,000 euros. Calculate your hedge ratio. The sale of IBM computers in France will be recorded as.

  What was the firms taxable income

Jacobsen Chemicals recently reported $780,000 of sales, $600,000 COGS, and $145,000 of depreciation and amortization charges.

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