How do estimate what is the net present value of project

Assignment Help Financial Accounting
Reference no: EM132758579

Problem 1: Dog Up! Franks is looking at a new sausage system with an installed cost of $411,500. This cost will be depreciated straight-line to zero over the project's seven-year life, at the end of which the sausage system is expected to be sold for $35,000 cash. No bonus depreciation will be taken. The sausage system will save the firm $129,400 per year in pretax operating costs, and the system requires an initial investment in net working capital of $22,500. All of the net working capital will be recovered at the end of the project. The tax rate is 23 percent and the discount rate is 13.2 percent. What is the net present value of this project?

Reference no: EM132758579

Questions Cloud

Create the september journal entry settling the option : Create the September 15 journal entry settling the option for cash, and assuming Shamrock accepted instead the shares in Dillon.
Does the income tax of public joint-stock companies : Does the income tax of public joint-stock companies appear in the income statement and why?
Calculate the equity value : Terminal value is 3 times the 2013 FCF. Cash and debt are constant. Debt refers to interest-bearing liabilities. Calculate the 2010 equity value
Conflicts can arise between team members : Working in a team is not always easy. Conflicts can arise between team members.
How do estimate what is the net present value of project : Capital will be recovered at the end of the project. The tax rate is 23 percent and the discount rate is 13.2 percent. What is the net present value of project
Prepare the journal entries to record Apple equity : Assuming Apple applies the equity method to account for its investment in Banana, prepare the journal entries to record Apple' equity in the net income
Which organizations play a role in financial reporting : Which organizations play a role in financial reporting for regulated utility companies operated by governments except? Federal Energy Regulatory Commission
Supply chain process improvement proposal : Add a Summary and Recommendations section to your Supply Chain Process Improvement Proposal.
Prepare Income Statement for the year ending December : Motor Vehicle at 25% of cost; Fixtures and Fittings at 30% reducing balance method. Prepare Income Statement for the year ending December

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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