What is the best Time Period for NPV or NFV analysis

Assignment Help Financial Management
Reference no: EM132071404

Machine A costs $30,000 to purchase and is worth $9,000 in 5 years at the end of its service life. Machine B costs $15,000 to purchase and is worth $2,000 in 2 years at the end of its service life. Assume that these machines are needed for 20 years (required service period) and can be repurchased at the same price in the future. (use 13% annual interest rate).  What is the best (MOST EFFICIENT) Time Period for an NPV or NFV analysis (years).

Reference no: EM132071404

Questions Cloud

Future value needed in first year of retirement : Subtract future pension flow from the Future Value needed in first year of retirement.
Capitalized equivalent worth of infinite annuity : What is the Capitalized Equivalent worth of an infinite annuity of $1,000 paid every other year, when the interest rate is 11% annually?
What is the annual cost of the lowest cost machine : You can choose between Machine A or B. Your annual interest rate is 9%. What is the Annual Cost of the lowest cost machine?
What is the difference between the NPV of each machine : Machine A costs $15,000 and will last 5 years, What is the difference between the NPV of each machine.
What is the best Time Period for NPV or NFV analysis : What is the best (MOST EFFICIENT) Time Period for an NPV or NFV analysis (years).
Compute the annual equivalent cost of each machine : Compute the Annual Equivalent Cost of each machine and subtract those values.
How accounting information can be used to assist in process : What agency problems the bank should be concerned with and how accounting information can be used to assist in this process.
What is the total market value of the firm without leverage : What is the total market value of the firm without leverage? What is the value of your share of the firm's equity in cases a and b?
Trade credit is lower than the bank interest rate : Which of the following strategies should cash-strapped firm adopt if the effective interest rate charged on trade credit is lower than the bank's interest rate?

Reviews

Write a Review

Financial Management Questions & Answers

  Calculate the values for the currency to deposit ratio

Calculate the values for the currency-todeposit ratio, the ratio of total reserves to deposits, the monetary base, the M1 money multiplier, and the M1 money supply.

  Use the present value formula

Think of something you want or need for which you currently do not have the funds. It could be a vehicle, boat, horse, jewelry, property, vacation, college fund, retirement money, etc. Select something which costs somewhere between $2,000 and $50,000..

  Compute the year six future value of deposits

Given a 4 percent interest rate, compute the year 6 future value of deposits made in years 1, 2, 3, and 4 of $1,100, $1,400, $1,400, and $1,500.

  You receive in each year as result of the swap

What is closest to the swap rate amounts will you receive in each year as a result of the swap?

  Pure play approach to determine required return

When calculating WACC using the pure play approach to determine required return, what company's data should i use e.g tax rate, debt? should i use the data for the company that I am computing the required return for or using data for the pure play co..

  How much will you pay for the stock

Alexander Corp. will pay a dividend of $3.80 next year. If you want a return of 15 percent, how much will you pay for the stock?

  Contribute per month to reach her goal

How much money does she need to contribute per month to reach her goal?

  Should this project be implemented if the firm requires

Should this project be implemented if the firm requires a 14 percent rate of return? Why or why not?

  Individuals performing ratio analysis

Individuals performing ratio analysis include banks evaluating potential loan applications from small businesses,

  What is westons cost of equity capital

Weston Industries has a debt-equity ratio of 1.5. Its WACC is 9.2 percent, and its cost of debt is 6%. The Corporate tax rate is 35%. What is Weston’s cost of equity capital? What is Weston’s unlevered cost of equity capital?

  Compute the divisor for this index

compute the divisor for this index. compute the index value at the close of day 2 3) At the close of day 2, stock C splits two.

  Target capital structure-what is the aftertax cost of debt

Mullineaux Corporation has a target capital structure of 75 percent common stock, 15 percent preferred stock, and 10 percent debt. Its cost of equity is 8 percent, the cost of preferred stock is 5 percent, and the pretax cost of debt is 7 percent. Th..

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