What is internal rate of return-should project be undertaken

Assignment Help Financial Management
Reference no: EM131976770

King’s Department Store is contemplating the purchase of a new machine at a cost of $31,144. The machine will provide $4,000 per year in cash flow for fourteen years. King’s has a cost of capital of 11 percent. Use Appendix D for an approximate answer but calculate your final answer using the financial calculator method. a. What is the internal rate of return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. Should the project be undertaken? Yes No

Reference no: EM131976770

Questions Cloud

How long will it take for you to pay off the loan : You have just received an offer in the mail from Friendly Loans. how long will it take for you to pay off the loan?
Have you seen instances where costing is not used effective : Describe how costing is used or could be used to better understand the financial breakdown of products and/or services delivered.
The present value of the future payments on the mortgage : The remaining mortgage principal at any point is the present value of the future payments on the mortgage.
Define strategic financial management external analysis : Strategic financial management external analysis (Create one table which identifies the external issues faced by the ACADIA healthcare.
What is internal rate of return-should project be undertaken : What is the internal rate of return? Should the project be undertaken?
Using financial statements especially in healthcare : Explain why it is important to know the scope of business being reviewed when using financial statements especially in healthcare.
What components and attributes will need to be included : A national builder has hired your software development firm. What components and attributes will need to be included in your home class? Why?
Implement the described database in ms access : MN405 - Data and Information Management - Convert the conceptual data models into relational data model and verify their structural characteristics
How important would you characterize globalization : How important would you characterize globalization for developing business professionals? Take a position and provide evidence.

Reviews

Write a Review

Financial Management Questions & Answers

  How the ratios discussed this week

How the ratios discussed this week could be used to evaluate a company of your choice. Use finance.yahoo.com for additional information.

  The source of taxable revenues make any difference

Given the following information on State A and State B: State A has no state income tax but a high state sales tax. State B has a medium state income tax and a medium state sales tax. Both States receive the same tax revenue per capita. Does one stat..

  What is the yield to maturity of seven-year zero coupon bond

What is the yield to maturity of a 7-year zero coupon bond?

  Explain the purpose and importance of financial ratios

Explain the purpose and importance of financial ratios and financial analysis. What are the limitations of financial ratio analysis?

  What are the reward-to-risk ratios

Stock Y has a beta of .85 and an expected return of 15.90 percent. Stock Z has a beta of .60 and an expected return of 10 percent. If the risk-free rate is 6.0 percent and the market risk premium is 10.2 percent, what are the reward-to-risk ratios of..

  What is cost of common equity capital

Cost of common equity) Falon Corporation is issuing new common stock at a market price of $27.32. Dividends last year were $1.39 and are expected to grow at an annual rate of 7.4 percent forever. What is Falon's cost of common equity capital?

  Longterm financing is perfectly matched with long-term asset

If long-term financing is perfectly matched (synchronized) with long-term asset needs and same is true of short-term financing, what will earnings after taxes

  Would the lender be likely to make the loan to the borrow

A borrower wants to finance an apartment building costing $2 million with a 75%, 25 year loan at the interest rate of 6%. The projects’ NOI is expected to be $150,000 during first year. Would the lender be likely to make the loan to the borrow? Show ..

  What is the after tax salvage value-operating cash flow

The company is thinking about a new project. They expect to have sales of 500,000. Variable and fixed costs should be 200,000. The equipment is going to cost 600,000. What's the after tax salvage value? What's the operating cash flow? What's the NPV?

  Bonds yield to maturity in the bond matures

A bond's market price is $1,100. It has a $1,000 par value, will mature in 12 years and has a coupon interest rate of 11 percent annual interest, but makes its interest payment semiannually. what is the bond's yield] to maturity? What happens to the ..

  Calculated using stright-line down to zero salvage value

A company is considering a 5-year project that opens a new product line and requires an initial outlay of $85,000. The assumed selling price is $97 per unit, and the variable cost is $63 per unit. Fixed costs not including depreciation are $20,000 pe..

  Expectation of the rate of return on the stock

If the market return this year turns out to be 15.00%, how would you revise your expectation of the rate of return on the stock?

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