What is the initial outlay of project

Assignment Help Finance Basics
Reference no: EM132169133

ABC Company is considering whether a project requiring the purchase of new equipment worth investing. The firm spent $20,000 three months ago to conduct market study. The cost of a new machine is $160,000, and the firm has to spend additional $10,000 to get it shipped and installed. This project will increase annual revenues by $225,000 and annual costs by $45,000. If the firm undertakes this project, $50,000 in net working capital investment is required. What is the initial outlay of this project?

Reference no: EM132169133

Questions Cloud

Comfort shoes entered the strategic alliance to acquire : Comfort Shoes Inc. and InStep Shoes Inc., two competing shoe brands, entered into a strategic alliance to study and acquire each other competencies.
Please compute the price for bond : Please compute the price for this bond. (Please show your work and round-off your calculations to four decimals)
What is the portfolio weight in the stock : Over the year, the bond fund had a return of 10%, while the stock fund had a return of 40%. What is the portfolio weight in the stock fund at the end
Analyze the significance of why suicide is becoming : The truth of the matter is that this number is probably much higher due to underreported instances of intentional death.
What is the initial outlay of project : If the firm undertakes this project, $50,000 in net working capital investment is required. What is the initial outlay of this project?
How much is the net proceed from the sale : If the company has the marginal tax rate of 35%, how much is the net proceed from the sale of this old asset.
What is the tax implication from the sale of old asset : If Sany can sell the machine for $200,000 today, what is the tax implication from the sale of this old asset? Assume that the tax rate is 40%.
Apparent inferiority of gold to stocks with respect : 1. In light of the apparent inferiority of gold to stocks with respect to both mean return and volatility, would anyone hold gold?
Describe some financial literacy strategies : Describe some financial literacy strategies that can implement within an organization.

Reviews

Write a Review

Finance Basics Questions & Answers

  Define each of the following terms sensitivity analysis

define each of the following termsa. cash flow accounting incomeb. incremental cash flow sunk cost opportunity costc.

  Why the company does not pay bribes

Is there a conflict between maximizing shareholder wealth and never paying bribes when doing business abroad? If so, how might you explain the firm's position.

  Discuss a tentative solution that addresses the issues

Discuss a tentative solution that addresses the issues or problems and how you would implement your solution.

  What is an angel capitalist

What is an angel capitalist? How do the financing techniques used by angels differ from those employed by professional venture capitalists?

  Interest qualify for the marital deduction

Mr. B died recently. As apart of his estate planning he gave a life estate in non-income producing property to Mrs. B (second wife).

  Create a household budget including all income and expenses

Create a simple household budget, including all income and expenses. There are various templates available online to help you do this.

  What is the future value of all the cash flows

You have $50,000 in your bank account. You plan to save $5,000 at the end of each year for the next 10 years. The interest rate is 8% per annum.

  Homer boats has accounts payable days of 20 inventory days

homer boats has accounts payable days of 20 inventory days of 50 and accounts receivable days of 30. what is its

  Firm uses the npv decision rule

A firm evaluates all of its projects by applying the IRR rule. If the required return is 14 percent, should the firm accept the following project?For the cash flows in the previous problem, suppose the firm uses the NPV decision rule.

  Evaluate drk’s dividend reinvestment plan

Evaluate DRK's dividend reinvestment plan. Will it increase shareholder wealth? Discuss the advantages and disadvantages involved here.

  Describe the process of bookbuilding

Describe the process of bookbuilding. Why is bookbuilding sometimes criticized as a means of setting the offer price?

  What is the depreciation expense

A project requires $84,749 of equipment that is classified as a 7-year property. What is the depreciation expense in Year 5 given the following MACRS depreciation allowances, starting with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, an..

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