The working capital needed for project b will be released

Assignment Help Accounting Basics

Reference no: EM13568057

Wriston Company has $360,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are as follows:

Cost of equipment required $ 360,000 $ 0

Working capital investment required $ 0 $ 360,000

Annual cash inflows $ 97,000 $ 76,000

Salvage value of equipment in eleven years $ 38,000 $ 0

Life of the project 11 years 11 years

The working capital needed for project B will be released for investment elsewhere at the end of eleven years. Wriston Company uses a 15% discount rate. (Ignore income taxes.)

Calculate net present value for each project.

Reference no: EM13568057

Questions Cloud

Given that you wish to use the payback rule with a cutoff : cash flowsproject year0 1 2 3 4a -5000 1000 1000 3000 0b -1000 0 1000 2000 3000c -5000 1000 1000 3000 5000a. given that

To assess the value of the firms stock financial analysts : imprudential inc. has an unfunded pension liability of 565 million that must be paid in 15 years. to assess the value

Your final essay should be about athletic vs dress shoes : your final essay should be about athletic vs dress shoes. your other essay should be about a good memory.be specific

If hallas company does close down the northwest plant fixed : hallas company manufactures a fast-bonding glue in its northwest plant. the company normally produces and sells 44000

The working capital needed for project b will be released : wriston company has 360000 to invest. the company is trying to decide between two alternative uses of the funds. the

Cash flows canyon tours showed the following components of : cash flows. canyon tours showed the following components of working capital last yearbeginning end of yearaccounts

What is the book value of klingons total assets today what : klingon widgets inc. purchased new cloaking machinery three years ago for 15 million. the machinery can be sold to the

The company has a cash balance of 20000 at the beginning of : the lbj company has budgeted sales revenues as

Reinvestment risk is the risk that at maturity does a : reinvestment risk is the risk that at maturity an investor will only be able to reinvest the proceeds of a bond at a

User Account

All Pages