What is the irr for the project

Assignment Help Finance Basics
Reference no: EM132953789

Your company is analyzing purchase of a machine costing $5,900 today. The investment promises to add $18,500 to sales one year from today, $14,500 two years from today, and $18,000 three years from today. Incremental cash costs should consume 75% of the incremental sales. The tax rate is 30% and the company's financing rate is 8.2%. The investment cost is depreciated to zero over a 3-year straight-line schedule. What is the IRR for the project?

Reference no: EM132953789

Questions Cloud

Futures price and the expected future spot price : Discuss whether the following statements are true or false and support them mathematically: "The relationship between futures price and the expected future spot
Early exercise of an american put : Discuss whether the following statement is true or false: "The early exercise of an American put is a trade-off between the time value of money and the insuranc
What is the bond coupon rate : A certain bond has a current yield of 6.50?% and a market price of ?$846.15. What is the? bond's coupon? rate?
Provide the calculations for the depreciation for the year : Provide the calculations for the depreciation for the year ended 29 Feb 2016. You are a trainee accountant for The Finance Team, a company
What is the irr for the project : Your company is analyzing purchase of a machine costing $5,900 today. The investment promises to add $18,500 to sales one year from today, $14,500 two years fr
What is the cost of borrowing : A required 5% compensating balance on borrowed funds; and a 0.5% commitment fee on any unused credit. What is the cost of borrowing?
What is the present value of cash flow : You have savings amounting to $1,500 and you expect to save an additional $800 next year. You need your savings to pay for your tuition fees of $800 in 2 years
Calculate the finance expense for the year ended feb : On 1 February 2016 Mzansi Risk entered into a lease agreement with Hollard. Calculate the Finance expense for the year ended 29 Feb 2016
How margin accounts protect investors against credit risk : Critically discuss how margin accounts protect investors against credit risk.

Reviews

Write a Review

Finance Basics Questions & Answers

  Launching a global business effort

What advice would you offer an entrepreneur interested in launching a global business effort? Specifically address the following:

  Discuss the potential risks and returns from using

In light of your findings, discuss the potential risks and returns from using put otions to attempt to profit from an anticipated decline in share price?

  Calculate mean and standard deviation for average insurance

Calculate the mean and standard deviation for average insurance costs for all 51 states. Provide at least two specific examples of addressing such needs.

  Summarizes the contents of the article

An article review is a critical commentary, which summarizes the contents of the article. Your review should include the key points in the article and how they apply to higher education.

  Estimate the return of a stock using two factor model

SBP's researcher has been given a task to estimate the return of a stock using two factor model. After careful analysis of the macro-economic data

  Calculate qian monthly required loan payment

Qian has just graduated from university, and she has received a letter stating that she must start repaying her student loans.

  Length of operating cycle for gladstone company

A. Find the length of operating cycle for Gladstone Company. B. Find the number of days in its cash cycle.

  Would portfolio be riskless

Suppose you owned a portfolio consisting entirely of long-term U.S. government bonds. Would your portfolio be riskless? Suppose you owned a portfolio

  Equivalent annual costs for selling the new machine

Cash flows have been forecasted in real terms. The real cost of capital is 15%. What is the equivalent annual costs for selling the new machine?

  Aspects related to future financial needs

Carl is considering investing in annuities as part of his retirement strategy. Explain two (2) aspects related to his future financial needs as a retiree.

  Create a risk-free hedge portfolio can be created

FIN510- Determine two to three methods of using stocks and options to create a risk-free hedge portfolio can be created. Support your answer with examples of these methods being used to create a risk-free hedge portfolio.

  How can coca cola use imc given the variety of products

How can Coca Cola use IMC given this variety of products? Your reference to Coca Cola is interesting. They have a wide variety of products such as regular coca

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