Summer tyme inc has cash available and is considering a new

Assignment Help Corporate Finance

Reference no: EM13381171

Summer Tyme, Inc. has cash available and is considering a new three-year expansion project that requires an initial fixed asset investment of $3.9 million. The fixed assets will be depreciated straight-line to zero over its three-year tax life. The fixed assets will have a market value of $200,000 at the end of the project. The project is estimated to generate following revenues during those three years: $2,000,000 for year one, $2,500,000 for year two, and $3,000,000 for year three. Costs are equal to 20% of the same yearsales. The project net working capital is equal to 10% of the next year's revenue. The tax-rate is 35%. What are the project's net cash flows for years 0-3? What is the IRR on this project?

Reference no: EM13381171

Questions Cloud

1 gomez electronics needs to arrange financing for its : 1. gomez electronics needs to arrange financing for its expansion program. bank a offers to lend gomez the required

Problem 1wacc calculationswillerton industries inc has the : problem 1wacc calculationswillerton industries inc. has the followingnbsp balances in its capital accounts as of

Genesis cash budget reportthe genesis operations management : genesis cash budget reportthe genesis operations management team is now preparing to implement the operating expansion

Question 1you have the opportunity to purchase an insurance : question 1you have the opportunity to purchase an insurance policy for your newborn son. you must make the payments

Summer tyme inc has cash available and is considering a new : summer tyme inc. has cash available and is considering a new three-year expansion project that requires an initial

1 ken allen capital budgeting analyst for bally gears inc : 1. ken allen capital budgeting analyst for bally gears inc. has been asked to evaluate a proposal. the manager of the

Mr art deco will be paid 100000 one year hence this is a : mr. art deco will be paid 100000 one year hence. this is a nominal flow which he discounts at an 8 nominal discount

Summer company is considering three capital expenditure : summer company is considering three capital expenditure projects. relevant data for the projects are as follows.project

Jupiter incorporated is interested in acquiring mercury : jupiter incorporated is interested in acquiring mercury limited a privately held firm whose owner desires to retire.

User Account

All Pages