What is the net present value of the asset

Assignment Help Accounting Basics
Reference no: EM131805325

Question - A company is considering purchasing as asset for $50,000 that would have a useful life of 5 years and a salvage value of $6,000. For tax purposes the entire original cost of the asset would be depreciated over 5 years using the straight-line method and the salvage value would be ignored. The asset would generate net cash inflows of $26,000 throughout the useful life. The project would require additional working capital of $8,000 which would be released at the end of the project. The company's tax rate is 30% and it's discount rate is 15%. What is the net present value of the asset?

Reference no: EM131805325

Questions Cloud

Develop the marketing strategy : You are the marketing manager for the Bowflex Revolution Home Gym. You believe the product appeals to both men and women.
Marketing manager for aquafresh extreme toothpaste : Now, imagine you are have accepted a new position as the marketing manager for Aquafresh Extreme toothpaste.
Find the probability that the new project fails : Find the probability that the new project is successful.Find the probability that the new project fails.
Find the expected number of defective chips produced : What is the name of the probability distribution of the number of defective chips produced tomorrow?Find the expected number of defective chips produced.
What is the net present value of the asset : The company's tax rate is 30% and it's discount rate is 15%. What is the net present value of the asset
Calculating the mean and standard deviation : Choose a binomial random quantity that you might deal with in your current or future work as an executive. Estimate (ie, guess) the value of n and p.
Identify n and p for this binomial random variable : A union strike vote is scheduled tomorrow, and it looks close. Assume that the number of votes to strike follows a binomial distribution.
Cognizant of the unique characteristics of services : Marketing managers must be cognizant of the unique characteristics of services: intangibility, inseparability, variability, and perishability
Discuss what is northern glass change in profits : What is NorthernGlass change in profits if the order is accepted

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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