How to calculate the expected npv

Assignment Help Financial Accounting
Reference no: EM132578444

An auto plant that costs $160 million to build can produce a line of flexfuel cars that will produce cash flows with a present value of $250 million if the line is successful but only $60 million if it is unsuccessful. You believe that the probability of success is only about 52%. You will learn whether the line is successful immediately after building the plant.

Question 1: Calculate the expected NPV. (Do not round intermediate calculations. A negative amount should be indicated by a minus sign. Enter your answers in millions rounded to 1 decimal place.)

Question 2: Would you build the plant?

Reference no: EM132578444

Questions Cloud

Importance of corporate level strategy for starbucks : Starbucks Corp. is looking to offer a more tempting menu, with a $100 million cash deal to buy a small bakery chain.
What the price should be so as to achieve the highest profit : For this part, assume that the airline charges a single price to all customers. Using the demand function for total demand determined
Find what amount should washington company report : On December 27, 2015, Washington wrote and issued checks, What amount should Washington Company report as total accounts payable at December 31, 2015?
Explain the positive and negative forces in a group : Kurt Lewin coined the term 'Group dynamics to explain the positive and negative forces in a group
How to calculate the expected npv : How to Calculate the expected NPV. (Do not round intermediate calculations. A negative amount should be indicated by a minus sign.)
Appreciation for high level of performance : The XYZ Company has just decided to take all of its 200 employees to Las Vegas for a three-day, expense-paid weekend
Ceo of a chain of pizza restaurants : The CEO of a chain of pizza restaurants wishes to initiate a program of CSR to be funded by a 5% levy on the company's operating profit.
Find what happens to the average cash flow from the mine : Now suppose you can costlessly shut down the mine in years of low silver prices. What happens to the average cash flow from the mine?
Reasons for ups superior profitability to fedex : With regard to Strategy Capsule 2.2, what additional data would you seek and what additional analysis would you undertake to investigate

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