What are the present values of the relevant investment cash

Assignment Help Accounting Basics
Reference no: EM133040697

Question - Crane, Inc., is considering investing in a new production line for eye drops. Other than investing in the equipment, the company needs to increase its cash and cash equivalents by $10,000, increase the level of inventory by $28,000, increase accounts receivable by $25,000, and increase accounts payable by $5,000 at the beginning of the project. Crane will recover these changes in working capital at the end of the project 12 years later. Assume the appropriate discount rate is 11 percent. What are the present values of the relevant investment cash flows?

Reference no: EM133040697

Questions Cloud

How much trade or business loss can each deduct : Ray has a current-year loss of $50,000 from a sole proprietorship, how much trade or business loss can each deduct on his tax return
Show the journal entry of each event related to the machine : Assuming cost model and straight line method is used to account for the machine, show the journal entry of each event related to the machine
Predictions regarding risk management : Discuss the trends, requirements, practices and predictions regarding risk management in the retail fashion industry. Discuss the risk management trends?
International business community : Response of the International Business Community: List AND describe 3 different types of initiatives undertaken by companies around the world tp out principle o
What are the present values of the relevant investment cash : Assume the appropriate discount rate is 11 percent. What are the present values of the relevant investment cash flows
Reasons behind the increased use of heroin in recent years : Discuss the reasons behind the increased use of heroin in recent years.
Four key factors in a firm credit policy : What are the four key factors in a firm's credit policy? How would a relaxed policy differ from a restrictive policy?
Explain the overall effect each error or omission will have : Explain the overall effect each error or omission will have (in amount) on the Group financial statements if it is not corrected
News that affected customer loyalty : Research a recent legal issue in the news that affected Customer loyalty (For example The United Express Flight 3411 incident, Wells Fargo account fraud scandal

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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