Ivesting 6 million in new machinery that will produce the

Reference no: EM13387965

10.32 Quasar Tech Co. is investing $6 million in new machinery that will produce the next-generation routers. Sales to its customers will amount to $1,750,000 for the next three years and then increase to $2.4 million for three more years. The project is expected to last six years and cost the firm annually $898,620 (excluding depreciation). The machinery will be depreciated to zero by year 6 using the straight-line method. The company’s tax rate is 30 percent, and its cost of capital is 16 percent.

a. What is the payback period?
b. What is the average accounting return (ARR)?
c. Calculate the project NPV.
d. What is the IRR for the project?

Reference no: EM13387965

Questions Cloud

What hiring processes are used within your current or : what hiring processes are used within your current or previous work environment and what impact have they had on

Explain how high entry barriers into market will influence : you have been hired as a consultant by your local mayor to look at the various market structures. your role is to

How much inventory will bookstore carry on average hint add : the gpi bookstore orders sweaters with the gpi logo on them and sells them for 40 a piece. during a typical month 80

Suppose that you are the database developer for a local : suppose that you are the database developer for a local college. the chief information officer cio has asked you to

Ivesting 6 million in new machinery that will produce the : 10.32 quasar tech co. is investing 6 million in new machinery that will produce the next-generation routers. sales to

The childrenrsquos online privacy protection act coppa and : the childrenrsquos online privacy protection act coppa and the childrenrsquos internet protection act cipa are both

How does a firmrsquos capital structure relate to your : how does a firmrsquos capital structure relate to your personal capital structure? in what ways are they similar?

Analyze and synthesize the financial reports of an : analyze and synthesize the financial reports of an organization of their choice and present their findings in a

Your marginal cost is constant at 75 across most of your : you compete with many firms offering similar products monopolistic competition. an economic consulting firm has

User Account

All Pages