Thinking of building a chemical processing plant

Assignment Help Financial Management

Reference no: EM131064727

GDebi Enterprises is thinking of building a chemical processing plant to produce 4-hydroxy-3-methoxybenzaldehyde. The firm estimates that the initial cost of the project will be $13.2 million, and the plant will produce cash inflows of $6 million for the next 5 years, after which time the project will terminate. In the 6th year however, the firm will need to clean up the site, which it estimates will cost it $4.9 million. The discount rate the firm wants to use for the project is 14.7 percent. What is the NPV of this project? (Enter answer in millions.)

Reference no: EM131064727

Questions Cloud

Relevant cash flow scenario-funds for net working capital : Relevant Cash flow scenario Assume you have just graduated from college with a degree in finance and you are trying to explain to your boss the importance of identifying and using the appropriate cash flows when you make financial decisions. The comp..

Formulate the linear programming model for this problem : Anderson Co. produces two popular grades of carpeting among its many other products. Formulate the linear programming model for this problem

Supplies and equipment for your operations : Your company is deciding to expand to the following countries, and you and two other managers will have to visit these countries to set up operations. You have $1,500.00 to convert in each currency. Utilizing the same exchange rate, while you are vis..

What is the effective cost of the commercial paper : On February 3, 2010, the Burlington Western Company plans a commercial paper issue of $20 million. The firm has never used commercial paper before but has been assured by the firm placing the issue that it will have no difficulty raising the funds. W..

Thinking of building a chemical processing plant : GDebi Enterprises is thinking of building a chemical processing plant to produce 4-hydroxy-3-methoxybenzaldehyde. The firm estimates that the initial cost of the project will be $13.2 million, and the plant will produce cash inflows of $6 million for..

What is the expected value of this stock ten years : SRS, Inc. just paid an annual dividend of $1.78 last month. The required return is 12 percent and the dividend growth rate is expected to be constant at 2.3 percent. What is the expected value of this stock ten years from now?

Two bond issues outstanding : Dinklage Corp. has 5 million shares of common stock outstanding. The current share price is $84, and the book value per share is $7. The company also has two bond issues outstanding. What are the company’s capital structure weights on a market value ..

Next two annual dividends will be in the amount : Last week, Onboard Co. has announced that the next two annual dividends will be in the amount of $2.3 and $4.19, respectively. After that, the dividends will increase by 3.6 percent annually. The required return on this stock is 12.98 percent. What i..

Prepare a budgeted income statement for each month : Prepare a budgeted income statement for each month for the next six months. Include a common size income statement for the budgeted numbers (divided each number to sales).

User Account

All Pages