Present value of net working capital

Assignment Help Finance Basics
Reference no: EM132705688

A company is considering a 3-project that would require a net working capital investment of $22,000 up-front. The company has a tax rate of 25% and a required return of 12%. The project is expected to generate annual pre-tax cost savings of $49,000. If you were calculating the NPV for this project, what amount would you use for the present value of net working capital (i.e. an amount that represents the present value of all cash flows related to the project's net working capital requirement) in your NPV calculation?

Enter your answer as a positive value (i.e. do not include a negative sign). Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit any commas and the $ sign in your response. For example, an answer of $1,000.50 should be entered as 1000.50.

Reference no: EM132705688

Questions Cloud

Current trends in approach to policing function : The relationship between traditional organizational structures of policing agencies. Current trends in the approach to the policing function
Prepare journal entries to record the transactions : On July 1, 2022, Chiefs retired 30% of the bonds at 102 plus accrued interest. Prepare journal entries to record the transactions
What should the market value of the stock : Ahmed is interested in purchasing the common stock of Inch, Inc., which is currently priced at $ 40. The company is expected to pay a dividend of $3 next year
Explain teh diagnostic tests to diagnosis the disorder : Patient and family education is important in increasing adherence. To provide education to patient and families, you are going to create a poster about.
Present value of net working capital : A company is considering a 3-project that would require a net working capital investment of $22,000 up-front.
What is the weighted average cost of capital : If a company has a capital structure of $5 million common stock with a cost of 17%, $2 million bonds at 4%, What is the Weighted Average Cost of Capital
Information Warfare and Cyberterrorism : Russian denial-of-service attack on the country of Estonia in 2007. Who was the victim of the cyberterrorism or information warfare campaign?
Expected present value of after-tax savings : The project is expected to generate annual pre-tax cost savings of $48,000. What is the expected present value of after-tax savings for this project?
Determine what methods of transmitting data packets : Determine what methods of transmitting data packets should be used and Discuss the type of infrastructure that needs to be in place

Reviews

Write a Review

Finance Basics Questions & Answers

  Understand the implications of the internal

Why do financial managers need to understand the implications of both the internal and the sustainable rates of growth?

  Read problem carefully and solve using given information

R.S.Mo. § 432.010. No action shall be brought to charge any executor or administrator, upon any special promise to answer for any debt or damages.

  Identify facial expressions

As an alternative to this exercise, watch a few minutes of your favorite stand-up comedian online. What facial expressions do you see, and which emotions does he or she convey?

  Compute the effective interest rate on the note payable

Prepare the journal entry that would be recorded when the first interest payment is made on December 31, 2012.

  Find the tax rate for year 2011

Find EBIT 2011 (Hint: Revenue* operating. margin) Find the tax rate for year 2011 (Hint: find tax paid/ (EBIT2011 - interest) *100%)

  What are the two-sided confidence limits on this weight

What is the weight Henry can be 95% confident the mean falls below? What are the two-sided confidence limits on this weight?

  Starting a new business what type of organization

If you were starting a new business what type of organization, ie. sole proprietorship, partnership, limited liability company or corporation, would you select?  What would be the advantages and disadvantages of your selected organization?  Would you..

  What is the expected value of the outcomes

Firm X is considering a project and its analyst have projected the following outcomes and probabilities.

  What is the effective interest rate on the notes payable

Prepare the journal entry to record interest expense during 2013.

  Calculate the internal rate of return

Darrin Corporation is considering a proposal to purchase a new piece of equipment. The cost of the equipment is $16,611. The equipment is estimated to provide an annual cash flow of $3,000 for the next nine years. The company has a required rate o..

  What is kiwi net income

Kiwi Corporation has $3,550 in sales, $1,200 in CGS, $250 in Depreciation. The firm marketing effort totaled $500 and Kiwi's interest expense is $70. Assume a 30% tax liability, what is Kiwi's net income?

  How as the office manager might be involved

As an office manager how should I approach the creation of the firm's operating budget.

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