What are the best-case npv and worse-case npv respectively

Assignment Help Portfolio Management
Reference no: EM131451634

Firm XXX is evaluating a project that costs $1,080,000,has a ten-year life and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 52,000 units per year. Price per unit is $50, variable cost per year is $30 and fixed costs are $730,000 per year. The tax rate is 35 percent and we required a 15 percent return on this project. Suppose the projections given for price,quantity,variable costs and fixed costs are all accurate to within +-10 percent. What are the best-case NPV and the worse-case NPV respectively?

Reference no: EM131451634

Questions Cloud

Analyze the virginias finest meat distributors business : Identify which one of the forces should be the primary factor in the development of future business and their information technology strategy.
What is the geometric mean annual return : What is your holding period return for the two years? What is the geometric mean annual return?
Describe the relevant legal concepts : CSM8003 - CONSTRUCTION LAW - Describe the relevant legal concepts and principles by reference to the judgments in the cases studied.
Plot the demand curve for the firm : Plot the demand curve for the firm. Determine the equilibrium price and quantity. Compute the elasticities for each independent variable.
What are the best-case npv and worse-case npv respectively : What are the best-case NPV and the worse-case NPV respectively?
Define the bp chief executive critics rights : BP chief executive Tony Hayward argued that "changing the culture of a 100,000 person company couldn't happen overnight." He had been in charge.
Explain the role of foreign direct investments : Macroeconomics Paper Assignment- "The Role of Foreign Direct Investments on economic development in Four Asian Tigers countries" 1995-2016.
Is the investment in the painting a good investment : What is the Future Value of the 2 million if the collector purchases the Cds? Is the investment in the painting a good investment?
Beneficiary of life insurance policy : You are the beneficiary of a life insurance policy. You can earn 6% compounded monthly on your money. Which option should you take and why?

Reviews

Write a Review

Portfolio Management Questions & Answers

  A european call and european put with the same strike price

Show that they change in value by the same amount when the volatility increases from a level σ1 to a new level σ2 within a short period of time.

  Explain what is the expected return on a portfolio

What is the expected return on a portfolio that is equally invested in the two assets? If a portfolio of the two assets has a beta of .5, what are the portfolio weights? If a portfolio of the two assets has an expected return of 8 percent, what is it..

  Prepare analysis paper about a portfolio of nobel laureates

Prepare a Analysis paper about A Portfolio of Nobel Laureates: Markowitz, Miller and Sharpe. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission.

  Revise sentence to eliminate hidden verbs and hidden subject

Eliminate hidden verbs and hidden subjects.- Revise the following sentences to eliminate hidden verbs and hidden subjects.

  Calculatethe composition of a portfolio of t-bills

Calculatethe composition of a portfolio of T-bills and gold forward contracts that would replicate the cash flows from the mine, and the real options value of the mine lease.

  Firm does not undertake the new investment

What is the price of a share of stock if the firm does not undertake the new investment? What is the value of the investment?

  Historical risk and return relationships in capital markets

Calculate the range of returns that an investor would have expected to achieve 95 percent of the time from holding common stocks.

  The necessary components as set forth in the rubric

Complete your Portfolio Project assignment, focusing on making sure that you have all of the necessary components as set forth in the rubric. Spend time making sure that the formatting meets SEU APA standards, and thoroughly proofread and grammar-che..

  What are the required rates of return on stocks

what are the required rates of return on Stocks C and D and explain, and describe what would happen if the stock were not in equilibrium.

  Find the weight that gives minimum risk of the portfolio

Find the weight that gives minimum risk(standard deviation) of the portfolio. What is the mean return and the variance of return of this new portfolio?

  Which critically examines the benefits and risks to company

Which critically examines the benefits and risks to a company, of incorporating corporate debt into a portfolio of equity and debt.

  Jiminys cricket farm issued a 30-year 6 percent semiannual

jiminys cricket farm issued a 30-year 6 percent semiannual bond 8 years ago. the bond currently sells for 97 percent of

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