What is the annual worth of the company

Assignment Help Financial Management
Reference no: EM131453508

A pharmaceutic engineer started a small-scale drug processing company for the production of Aloe Vera extract with an initial investment of $750 000. The company only broke even (no profit) the first 3 years of its start-up, but years 4 through 8, it made a profit of $ 1,075,000 per year and after which the profit was observed to increase by a constant amount of $135000 for the next four years. It cost the company an aggregate sum of $620,000 per year to maintain and run the company. The MARR for the project is 10 %.

A) Determine the engineering economy symbols and their corresponding value

B) Draw the cash flow diagram

C) Evaluate the present worth of the drug processing company at year 0

D) Calculate the Future worth of the drug process company based on the total number of years consider in the problem statement

E) What is the annual worth of the company.

Reference no: EM131453508

Questions Cloud

Which of the given function do not work with three-d formula : Which of the following functions do NOT work with 3D formulas? A two-variable data table returns ________ result(s) for each combination of two variables.
Analyze the mechanism of asset-liability management : describe and analyze the practice/mechanism of Asset-liability Management (ALM),
Describe an array and its various implementations : Respond to the following about arrays and their implementations: Describe an array and its various implementations
Does the terrorism threat level affect your views : Comment on how well the USA Patriot Act balances the interests of law enforcement versus individual rights to free speech and privacy
What is the annual worth of the company : Determine the engineering economy symbols and their corresponding value. What is the annual worth of the company.
Lifeline checking account is accurately described : A lifeline checking account is accurately described as an account that
Sold australian dollar call options at premium : Bulldog, Inc., has sold Australian dollar call options at a premium of $.02 per unit, and an exercise price of $.89 per unit.
Would the cure change your mind about the alterations : Is there a cure for this disorder? Would the cure change your mind about the alterations of the embryo
Determine the total dollar amount of your profit : Determine the total dollar amount of your profit or loss from your position in the put option.

Reviews

Write a Review

Financial Management Questions & Answers

  Level annual payments

A loan is to amortized by n level annual payments of X, where n≥6. You are given: i) The amount of interest in the first payment is $ 458.44. ii) The amount of interest in the third payment is $ 432.92. iii) The amount of interest in the fifth paymen..

  Projects subsequent cash flows are critically dependent

Norris Production Company (NPC) is considering a project that has an up-front cost at t = 0 of $2,500. (All dollars in this problem are in thousands.) The project's subsequent cash flows are critically dependent on whether a competitor's product is a..

  The put and call parity theorem

The Put/Call Parity Theorem:

  Stephen plans to purchase car seven years from now

Stephen plans to purchase a car 7 years from now. The car will cost $38,643 at that time. Assume that Stephen can earn 3.43 percent (compounded monthly) on his money. How much should he set aside today for the purchase?

  Dupont equation is often used to uncover strengths

DuPont equation is often used to uncover strengths and weaknesses in the company's financial structure. Suppose that profit margin is 3% and total asset turnover is 5 times per year. Find equity multiplier if the Return on Equity is 20%. Show work.

  Determine the bonds face value

Draw a clear completely labeled cash flow diagram of the entire bond transcation using dollar accounts where they are are known and $X to represent the bond's face value.

  What was boatmens real rate of return in percents

Last year, Boatmen of River Styx earned a rate of return of 14.85 percent on their bond investments. During that time, the inflation rate was 6.71 percent. What was Boatmen's real rate of return (in percents)?

  Does the type of contract matter

Bob is known throughout his neighborhood as being "crazy." None of his neighbors know him very well and he is only known by this reputation. If Bob enters into a contract, how do we know if it will be valid, voidable, or void? Does the type of contra..

  Common size income statements represent all figures

Common size income statements represent all figures on the income statement

  Difference between spot transaction and forward transaction

What does it mean to describe the foreignexchange market as an "over-the-counter market"?- What is the difference between a spot transaction and a forward transaction in the foreignexchange market?

  What is the projects equivalent annual cost

Josh and Co. is interested in starting a new branch of business. This 4-year project has an initial asset investment of $432,424, and initial net working capital investment of $36,059, and an annual operating cash flow of -$50,835. The fixed asset is..

  What was your percent return

Investment Return MedTech Corp stock was $51.75 per share at the end of last year. Since then, it paid a $1.25 per share dividend. The stock price is currently $63.30. If you owned 400 shares of MedTech, what was your percent return?

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