What is npv to crisps of offering credit to bigbag

Assignment Help Financial Management
Reference no: EM131923720

Crisps has received an order for 10000 bags of potato chips from BigBag. Crisps views BigBag to be a one-time customer. Crisps sells its large bags of potato chips for $1.90 each, and calculates its internal cost for the product at $1.45 each.

Market research estimates that there is a 25% chance that BigBag will pay in full what it owes.

Based on this information, what is the NPV to Crisps of offering credit to BigBag?

$

Place your answer to the nearest dollar. Do not include a dollar sign or comma.

Reference no: EM131923720

Questions Cloud

Project earnings and dividends for the next year : Project earnings and dividends for the next year (20X6). what is the anticipated stock price (P0) at the beginning of 20X6?
What should be the price of the call option : If the borrowing rate is 5% per year, what should be the price of the call option?
Initial investment in fixed asset : What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?
Charge for each apartment to break even : The tenants will pay for all utilities. What monthly rent must she charge for each apartment to break even?
What is npv to crisps of offering credit to bigbag : Based on this information, what is the NPV to Crisps of offering credit to BigBag?
What is rate of return on investment : What is his net profit or loss? What is the rate of return on investment?
What was return on investment : Suppose Dave invested only $75,000 of his own money and borrowed $475,000 interest-free from his rich father. What was his return on investment?
Right of an owner of share common stock : Which of the following is a right of an owner of a share common stock?
Component cost of common equity using capm for firm : Estimate the component cost of common equity using CAPM for the firm.

Reviews

Write a Review

Financial Management Questions & Answers

  All future dividends will be raised abnormally

A company wants to return funds without signalling that all future dividends will be raised abnormally.

  How sensitive is ocf to changes in quantity sold

How sensitive is OCF to changes in quantity sold?

  A project will produce cash inflows

A project will produce cash inflows of $2,000 a year for 8 years. There is also a final cash inflow of $10,000 in year 8. The project's initial cost is $12,000. What is the net present value of this project if the required rate of return is 15 percen..

  Initial cost of plant if company raises equity externally

What is the initial cost of the plant if the company raises all equity externally?

  Introduce new burger

A cafeteria wants to introduce a new burger, with bread and beef together weighing at least 1 ounce.

  What should the price of portage bay stock be

what should the price of Portage Bay's stock be?

  What are the main components of sustainability

Discuss the recent trends and developments in the field of finance and what are the main components of sustainability?

  Is this a good investment for the buyer on a before tax

Is this a good investment for the buyer on a before tax basis (calculate the internal rate of return and justify your answer)?

  What is the npv of this project for the restaurant

Suppose that a local restaurant is trying to evaluate the value of adding a food truck to their business. The restaurant is financed with a bank loan (debt) at 9.00% per year, and has owners (equity) who want a 15.00% annual return on their investmen..

  Save money for education

You are going to save money for your son’s education. You have decided to place $1,377 every half year at the end of the period into a saving account earning 12.50 percent per year, compounded semi-annually for the next 12 years. How much money will ..

  Dividends are expected to grow-hat is current share price

Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 24 percent for the next three years, with the growth rate falling off to a constant 7 percent thereafter. If the required return is 11 percent, and the company just paid a di..

  What is the standard deviation of returns

Mackey Motors will return a 40% return in a boom economy, a 10% return in a normal economy, and - 25% return in a recession. If there is a 30% chance of a boom economy, 50% chance of normal growth, and 20% chance of a recession, what’s the standard d..

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