Revenues and other operating costs are expected to be

Assignment Help Finance Basics
Reference no: EM13485759

Temple Corp. is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated by the straight-line method over its 3-year life, and would have a zero salvage value. No new working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's NPV?

Risk-adjusted WACC

10.0%

Net investment cost (depreciable basis)

$65,000

Straight-line deprec. rate

33.3333%

Sales revenues, each year

$65,500

Operating costs (excl. deprec.), each year

$25,000

Tax rate

35.0%

Reference no: EM13485759

Questions Cloud

The feds action did not affect the forecasted cash flows : lasik vision inc. recently analyzed the project whose cash flows are shown below. however before lasik decided to
Torrid romance publishers has total receivables of 3000 : torrid romance publishers has total receivables of 3000 which represent 20 days sales.average total assets are 75000.
The firm expects to operate the machine for 4 years and : marshall-miller amp company is considering the purchase of a new machine for 50000 installed. the machine has a tax
A firm issues a bond at par value shortly thereafter : a firm issues a bond at par value. shortly thereafter interest rates fall. if you calculated the coupon rate coupon
Revenues and other operating costs are expected to be : temple corp. is considering a new project whose data are shown below. the equipment that would be used has a 3-year
A chain of appliance stores purchases inventory with a net : a chain of appliance stores purchases inventory with a net price of 500000 each day. the company purchases inventory
Company x is 60 debt-financed and the expected return on : company x is 60 debt-financed and the expected return on its debt is 6. its equity beta is 2. risk-free rate of return
Revenues and other operating costs are expected to be : your company csus inc. is considering a new project whose data are shown below. the required equipment has a 3-year
Assuming the cost of direct materials used is 1500000 : assuming the cost of direct materials used is 1500000 compute the total manufacturing costs using the information

Reviews

Write a Review

Finance Basics Questions & Answers

  The sales returns and allowances

The Sales Returns and Allowances, A) account is presented on the balance sheet as a deduction from Accounts Receivable. B) on the income statement as a deduction from Sales. C) on the income statement as an addition to Sales. D) on the balance sheet ..

  Video concepts incvci manufactures a line of dvd recorders

video concepts inc.vci manufactures a line of dvd recorders dvds that are distributed to large retailers. the line

  Determining rate of interest

You're considering an investment in US Treasury bond but aren't sure what rate of interest it should pay. What rate of interest should US treasury bond pay?

  Capital structure-stephens security

Stephens Security has two financing alternatives: (1) A publicly placed $50 million bond issue. Which alternative has the lower cost (annual percentage yield)?

  Which one should be chosen based on the npv

What is the NPV for the two systems? (Enter negative amounts using negative sign, e.g. -45.25. Round answers to 2 decimal places, e.g. 15.25.)

  What is the cost of this newly issued preferred stock

Calculate the cost of preferred stock based on the outstanding issue, given the current market price.

  Demand for imported tv sets

Assume that during a given year: the price of TV sets increases by 4% in Japan, the dollar depreciates by 5% with respect to the yen, customer incomes in the U.S. increase by 3%,

  Comment on the relative liquidity of the companies by

comparative statement data for al sharif company and weber company two competitors are presented below. all balance

  Is the stock a good buy and why

McMillen House of Books recently paid a $3 dividend on its preferred stock. Investors require a 6% return on the stock. The stock is currently selling for $45. Is the stock a good buy and why?

  How much would this prize be worth

The remaining $1,500 will be paid in three annual payments of $500 each, starting one year after the drawing. How much would this prize be worth to you if you can earn 9 percent on your money?

  Cost of equity can be calculated in a variety of way

Cost of Equity An organization's cost of equity can be calculated in a variety of way

  What is bestways cost of equity capital

According to Value Line, Bestway has a beta of 1.15. If 3-month Treasury bills currently yield 7.9 percent and the market risk premium is estimated to be 8.3 percent, what is Bestway's cost of equity capital?

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