The fixed asset is fully depreciated over the life

Assignment Help Financial Management
Reference no: EM13914675

A 4-year project has an initial fixed asset investment of $21,840, an initial NWC investment of $2,080, and an annual OCF of -$33,280. The fixed asset is fully depreciated over the life of the project and has no salvage value. Required: If the required return is 9 percent, what is the project's equivalent annual cost, or EAC? (Do not round your intermediate calculations.)

Reference no: EM13914675

Questions Cloud

Calculate the price of each of the three bonds : Bond A has a 5% annual coupon, matures in 3 years and has a $1,000 face value. Bond B has a 6% annual coupon, matures in 3 years and has a $1,000 face value. Calculate the price of each of the three bonds and indicate whether each bond is trading at ..
Formulate hypothetical economic policy motivate automobile : Do you see any problem with the implicit signals the federal government is sending to American auto manufacturers and to American car drivers through these policies? Briefly discuss.
How many bonds they need to issue : X Corporation’s outstanding bonds have a $1,000 par value, a 6% semi annual coupon, 3 years to maturity and a 8% YTM. What is the bond’s price? If X Corporation needs to raise 2 million, how many bonds they need to issue?
Phase of the sdlc to ensure software development success : Senior management at your company is concerned about why so many software development efforts fail. They have asked you to develop a presentation that explains the activities that take place during each phase of the SDLC to ensure software develop..
The fixed asset is fully depreciated over the life : A 4-year project has an initial fixed asset investment of $21,840, an initial NWC investment of $2,080, and an annual OCF of -$33,280. The fixed asset is fully depreciated over the life of the project and has no salvage value. Required: If the requir..
What is the weight in grams for the pineapple : A pineapple is 7 times as heavy as an orange. The pineapple weighs 870 grams more than the orange. What is the weight in grams for the pineapple and orange
Standard deviation of the return on risk-averters portfolio : Risk-Averters Inc. invest 2/3 of its funds in General Mills Stock and the remainder in Budweiser Beer. On past evidence, the standard deviation of the returns are 20% for General Mills and 40% for Budweiser Beer. Suppose the correlation coefficient b..
Critical to the success of any new information system : he requirements analysis phase answers the question, ‘What does the user need and want from a new system?' The requirements analysis phase is critical to the success of any new information system! In this milestone we need to identify what informa..
What is the value of brushy mountains stock : Brushy Mountain Mining Company's coal reserves are being depleted, so its sales are falling. Also, environmental costs increase each year, so its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate o..

Reviews

Write a Review

Financial Management Questions & Answers

  Retirement fund-what would his nest egg amount

Jacqueline Strauss, whose 25 is committed $3000 per year for her retirement fund and assumes shell retire at 65. How much will she have accumulated when she turned 65 if she invests in equities and earns 8% on average?

  How much do you have to pay each month

Suppose by the time you graduate your student loan will accumulate to $33,000, the national average for college graduates of 2014. If you plan to pay back the loan in 5 years with equal monthly payment, and assume the interest rate is 6% compounded m..

  What risks and opportunities do the three common strategies

you will explore how businesses react to changing economic times and the influence this has on productservice

  Annual expense ratio is netted out of the funds return

You purchased 3,800 shares in the New Pacific Growth Fund on January 2, 2010, at an offering price of $42.00 per share. The front-end load for this fund is 5 percent, and the back-end load for redemptions within one year is 2 percent. what is your to..

  An increase in capital per worker-technological progress

An increase in capital per worker will: Technological progress will: If technology advances, then:

  Planning for her retirement

Brittany is planning for her retirement. She has 30 years before she retires. She plans to keep the money in a bank, which will pay interest at the annual rate of 3% and compound it monthly. In the second and subsequent months, she will increase the ..

  Computer-based order entry system-what is irr for project

Your firm is contemplating the purchase of a new $605,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. If the tax rate is 34 percent, what is the IRR for this project?

  Analyzing a proposed expansion project

The Thomas Co. is analyzing a proposed expansion project. Currently, the company owns 15 acres of land, which it purchased for $6 million 5 years ago. The land is currently valued at $7.2 million and is totally debt-free. The bonds are currently pric..

  Fixed costs and variable costs-determine the profit

A manufacturing company has fixed costs of $120,000 per month and variable costs of $6 per unit. Determine the profit for each of these scenarios.

  Calculate the expected return on the portfolio

Your portfolio is diversified. It has an expected return of 11% and a beta of 1.10. You want to add 200 shares of Tundra Corporation at $40 a share to your portfolio. Tundra has an expected return of 13.0% and a beta of 1.50. The total value of the i..

  Calculate required return on manufacturing common stock

King Farm Manufacturing Company’s common stock has a beta of 1.04. If the risk-free rate is 2.65 percent, and the market return is 8.71 percent, calculate the required return on King Farm Manufacturing’s common stock.

  What is the remaining balance on the loan after three years

Raylan Givens borrows $150,000 to buy a house. The adjustable rate mortgage carries a 1.5 percent rate for the first 3 years. After that the rate will change annually to reflect market conditions. The annual cap is 2% (i.e., the largest increase in a..

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