Should the firm make the investment

Assignment Help Finance Basics
Reference no: EM131945864

Question: Blanco corporation is considering investing in a production system. The cost would be $57,000 and it is expected that it would produce $33,000 per year for 4 years. If the firm uses a 9% discount rate, should the firm make the investment. Use IRR to decide. The response must be typed, single spaced, must be in times new roman font (size 12) and must follow the APA format.

Reference no: EM131945864

Questions Cloud

Calculate the equivalent annual cost of each alternative : Blooper Industries must replace its magnoosium purification system. Quick & Dirty Systems sells a relatively cheap purification system for $12 million.
How many grams of hydrochloric acid are produced : If excess sulfuric acid reacts with 30.0 g of sodium chloride, how many grams of hydrochloric acid are produced?
What is the present value of the tax savings : Bling enterprises is contemplating the purchase of a $1 million piece of equipment. The equipment is eligible for a CCA rate of 30%, the company's tax rate.
Determine the project should be accepted or not : Blue Note Jazz Productions has decided to cash in on the country craze by starting a subsidiary that will promote concerts by "Country Jazz" artists.
Should the firm make the investment : Blanco corporation is considering investing in a production system. The cost would be $57,000 and it is expected that it would produce $33,000 per year.
What is the firm market-to-book ratio : Black Dahlia Corp.'s stock price at the end of last year was $57.05. Black Dahlia Corp.'s total common equity is $112.95 million.
How many grams of h2o will you make : You start with 150.0 g of pentane and 500.0 L of O2. How many grams of H2O will you make?
Find the simple moving average : For this assessment, suppose that you are the operations manager for ABC Manufacturing, a small manufacturing company founded three years ago.
Finding the current price of the bond : Black Water Corp. just issued zero-coupon bonds with a par value of $1,000. The bond has a maturity of 21 years and a yield to maturity of 7.56 percent.

Reviews

Write a Review

Finance Basics Questions & Answers

  How much must set aside each year

You are saving for retirement. To live comfortably, you decide you will need to save $2 million by the time you are 65.

  Describe the term efficient market

Carefully describe what is meant by the term efficient market. Art there different levels of market efficiency discuss those levels?

  Explain decision making on the basis of the irr and npv

Explain decision making on the basis of the IRR and NPV criterion and Compute the net present value for each project if the firm has a 10% cost of capital. Which project should be adopted

  How much is this worth today

In ten years you will inherit 100,000 from your grandfather's trust. If interest rates are at 5%, how much is this worth today?

  Discussion-corporate culture-strategy and leadership

Your local small business association is organizing a workshop centered upon the impact of corporate culture on leadership and corporate strategy.

  What will the price be 5 years from now

A 25-year, $1,000 par value bond has an 8.5% annual payment coupon. The bond currently sells for $925. If the yield to maturity remains at its current rate, what will the price be 5 years from now?

  What is the subscription price

Rights Hoobastink Mfg. is considering a rights offer. The company has determined that the ex-rights price will be $61. The current price is $68 per share, and there are 10 million shares outstanding. The rights offer would raise a total of $60 mil..

  Coupon payment after six months

Question 1: A ten-year, inflation-indexed bond has a par value of $10,000 and a coupon rate of 5 percent. During the first six months since the bond was issued, the inflation rate was 2 percent. Based on this information, the coupon payment after ..

  Effective rate of interest on the loan

If the bank requires the company to hold 15 percent of the amount of the loan on deposit as a compensation balance, what is the effective rate of interest on the loan?

  What is the difference between a 401-k and an ira

What is the difference between a 401-K and an IRA? Should I have both? Can I have both? How does a 401-K fit into retirement planning and how does an IRA fit into retirement planning?

  The bank pays a quarterly dividend of 165 on this stock

1 your finance text book sold 55500 copies in its first year. the publishing company expects the sales to grow at a

  Difference between freely floating system and a dirty float

Explain the difference between a freely floating system and a dirty float. Which type is more representative of the U.S. system?

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