What is the initial cost of project

Assignment Help Financial Management
Reference no: EM132053574

XYZ Corp. is considering a new project. The project will require $334570 for new fixed assets, $163658 for additional inventory and $20483 for additional accounts receivable. Short-term debt is expected to increase by $86127 and long-term debt is expected to increase by $298030. The project has a 5-year life. The fixed assets will be depreciated straight-line to a zero book value over the life of the project. At the end of the project, the fixed assets can be sold for 25% of their original cost. The net working capital returns to its original level at the end of the project. The project is expected to generate annual sales of $564830 and costs of $396429. The tax rate is 35% and the required rate of return is 15%. What is the initial cost of this project? (Round answer to 0 decimal places, do not round intermediate calculations)

Reference no: EM132053574

Questions Cloud

What is the test statistic for a sample proportion : To test H0: p = 0.500, what is the test statistic for a sample proportion 0.630 and sample size 85. Enter your answer with 3 decimal places.
What is the amount of operating cash flow for first year : The tax rate is 35% and the required rate of return is 15%. What is the amount of the operating cash flow for the first year of this project? (
Test the claim sample standard deviation : Test the claim at a = 0.05 that µ >15. A sample size of 30 yields a sample mean of 17.5 and a sample standard deviation of 5.
Explain why did you include each of the ten elements : Begin by preparing of Code of Ethics for a fictional company which should include at minimum ten elements.
What is the initial cost of project : XYZ Corp. is considering a new project. The tax rate is 35% and the required rate of return is 15%. What is the initial cost of this project?
What is current price per share of the stock : What is the current price per share of the stock? What is the new price per share of the existing shares of stock?
What was the rate of inflation : What was the rate of inflation for the 1950's, as measured by the percentage change in the CPI?
How many different groups of guests can you have : Since you will take up one seat, you can only have five friends at one time. How many different groups of guests can you have?
Distribution of sample means tends to be normal : Because the distribution of sample means tends to be normal, we use z-scores and what else to find probabilities for specific sample means?

Reviews

Write a Review

Financial Management Questions & Answers

  Working in business to learn the ropes

You have a two children, A and B. Child A is not going to college but is working in a business to learn the ropes. Child A plans on opening a business someday. Child B is attending college. You put a certain amount of money into an account.

  What is the project npv if the required rate of return

A magazine publisher wants to launch a new magazine geared to college students. What is the project's NPV if the required rate of return is 16%?

  What is the beta of portfolio with expected return

What is the beta of a portfolio with an expected return of 25% if the risk-free rate is 5% and the expected return of the market is 15%?

  Firm wishes to maintain an internal growth rate

A firm wishes to maintain an internal growth rate of 11.25 percent and a dividend payout ratio of 49 percent. The current profit margin is 7.1 percent and the firm uses no external financing sources. What must total asset turnover be?

  Achieve low inflation without increasing unemployment rate

The Fed can always implement tight/restrictive monetary policy to achieve low inflation without increasing unemployment rate.

  Find the shimmers taxable income and tax liability

What are Shimmer's taxable income and tax liability for the year? Use Corporate Tax Rate Table.

  Is the current stock price an equilibrium price

Is the current stock price an equilibrium price, based upon the SML calculation of ke for Tucker?- What do you think the appropriate equilibrium price is? How will that price be achieved?

  Choice of three retirement planning investments

Determine, for each of the given number of years, which of these investments is the best for Dixon if he plans to make one payment today into one of these funds and to retire in the following number of years.

  Annual property tax assessments

Two parcels of land are being considered for a new office building. Both sites cost the same amount but differ mainly in their annual property tax assessments. How much money would have to be set aside today for each site to provide for property taxe..

  Justify your answer with appropriate calculations

Would this condition be satisfied if the number of waiting customers is a Poisson random variable with a mean of 5? Justify your answer with appropriate calculations.

  Two different salary arrangements

You’ve just joined the investment banking firm of Dewey, Cheatum, and Howe. They’ve offered you two different salary arrangements.

  Weighted average cost of capital

Cruiseliners, Inc. has 230,000 shares of common stock outstanding at a market price of $40 a share. Cruiseliners' just paid an annual dividend in the amount of $1.75 per share. The dividend growth rate is 3 percent. The bonds are selling at 102 perce..

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