What is the net present value of a project

Assignment Help Financial Management
Reference no: EM13880593

What is the net present value of a project that has an initial cost of $89,000 and produces cash inflows of $21,000 a year for 7 years if the discount rate is 11.5 percent?

Reference no: EM13880593

Questions Cloud

Time line-calculate the yield to maturity : A four-year bond has an 8% coupon rate and a face value of $1000. If the current price of the bond is $870.51, calculate (YTM) the yield to maturity (assume annual interest payments)
What does the efficient market hypothesis : If the public expects a corporation to lose $5 a share this quarter and it actually loses $4, which is still the largest loss in the history of the company, what does the efficient market hypothesis say will happen to the price of the stock when the ..
Number of shares outstanding-price per share after split : A company has just announced a 3-for-1 stock split, effective immediately. Prior to the split, the company had a market value of $5 billion with 100 million shares outstanding. What is the value of the company, the number of shares outstanding, and p..
Considering new project-will require initial cash investment : The Electrical Engineering Company is considering a new project that will require an initial cash investment of $612,000. The project will produce no cash flows for the first three years. The projected cash flows for years 4 through 8 are $84,000, $1..
What is the net present value of a project : What is the net present value of a project that has an initial cost of $89,000 and produces cash inflows of $21,000 a year for 7 years if the discount rate is 11.5 percent?
Standard deviation of the minimum variance portfolio : What is the expected return and standard deviation of the minimum variance portfolio of the two, if Stock A has a 15% expected return and Stock B has a 20% expected return, and the correlation coefficient is 0.3?
Investment has an initial cost-internal rate of return : An investment has an initial cost of $1.87 million and a life of 5 years. The annual cash flows from this equipment are estimated to be $548,200, $565,500, $516,900, $528,000 and $234,000. Should this project be accepted based on internal rate of ret..
What is the operating cash flow for first year of project : The Sports Club wants to expand its facility. The expansion will require $350,000 in building improvements that will be depreciated on a straight-line basis over a 10-year period. The expanded area is expected to generate $250,000 in additional sales..
Population standard deviation : The manager of a grocery store has taken a random sample of 100 customers. The average length of time it took the customers in the sample to check out was 3.1 minutes. The population standard deviation is known to be 0.5 minutes.

Reviews

Write a Review

Financial Management Questions & Answers

  Calculate break-even in dollars

Calculate break-even in DOLLARS given the following information: sales per unit $40, variable costs $15, fixed costs $15,000, and desired profit $20,000.

  Current ratio of a firm would be increased

The current ratio of a firm would be increased by which of the following?

  What is the principal balance on the loan

You take out a 30-year $450,000 mortgage loan with an APR of 7.75 percent and monthly payments. In 16 years you decide to sell your house and payoff the mortgage. What is your monthly payment? What is the principal balance on the loan? What is your t..

  Formulate a zero-net-investment arbitrage portfolio

The one-year futures price on a particular stock-index portfolio is 406, the stock index currently is 400, the one-year risk-free interest rate is 3%, and the year-end dividend that will be paid on a $400 investment in the index portfolio is $5. Form..

  If the adoption of a new product will reduce the sales

If the adoption of a new product will reduce the sales of an existing product, then the projected sales should: a) reflect only the sales of the new product b) include only the reduction amount. c) equal the incremental increase in total sales. d) be..

  Trade stocks on the floor of the new york stock exchange

If you want to trade stocks on the floor of the New York Stock Exchange, you must purchase a “seat,” which is really a license to buy or sell stocks. Can you explain why the price of such seats rose sharply in the 1980s and early 1990s but have been ..

  Perpetuity value

Given an interest rate of 4 percent per year, what is the value at date t = 5 of a perpetual stream of $2,400 payments that begins at date t = 10?

  Dividend check you will get next time dividend is paid

Fuller Preferred has a nominal rate of 3% with a par value of $3.75. You just bought 3 round lots at a quote of 12.65. What is the dividend check you will get the next time a dividend is paid?

  The type of risk which can be diversified away is called

1 the type of risk that can be diversified away is called .a unsystematic riskb systematic riskc nondiversifiable riskd

  What annual return you will need to earn to meet this goal

You plan on retiring in 20 years. You currently have $275,000 and think you will need $1,000,000 to retire. Assuming you don’t deposit any additional money into the account, what annual return you will need to earn to meet this goal.

  Highest tax bracket for ordinary income

Jeanie acquires an apartment building in 2003 for $260,00 and sells it for $500,000 in 2014. At the time of sale, there is $78,000 of accumulated straight-line depreciation on the apartment building. Assuming Jeanie is in the highest tax bracket for ..

  What is the approximate size of the mortgage

Your real estate agent mentions that homes in your price range require a payment of approximately $1,200 per month for 30 years at 12% (APR) interest. The first payment will be made at the end of the third year (month 36), and the total number of pay..

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