What is the net present value of the project

Assignment Help Finance Basics
Reference no: EM132379757

A project will produce an operating cash flow of $135,000 a year for three years. The initial cash outlay for equipment will be $234,000. The net after tax salvage value of $27,200 will be received at the end of the project. The project requires $64,500 of net working capital up front that will be fully recovered. What is the net present value of the project if the required rate of return is 12.5 percent?

Reference no: EM132379757

Questions Cloud

Short-term and long-term financial decisions assignment : Short-Term and Long-Term Financial Decisions Assignment help and solution, Homework help - Calculate Mollycaits operating breakeven point - Calculate Mollycaits
Review and describe basecamp tool-describe ihmc cmaptools : Review the attachment and define the standards we will use for srs, sdd, and pmp. Review and describe basecamp tool. Review and describe IHMC Cmaptools.
Prepare an income statement and retained earnings statement : Prepare an income statement and a retained earnings statement for the month of March and a classified balance sheet at March 31.
What percentage of the? firm assets : What percentage of the? firm's assets does the firm finance using debt? (liabilities)?
What is the net present value of the project : What is the net present value of the project if the required rate of return is 12.5 percent?
HI5002 Finance for Business Assignment Problem : HI5002 Finance for Business Assignment Help and Solution, T2 2019 - Holmes Institute, Australia - Macquarie Company Performance Analysis
Amount of the initial cash flow for expansion project : Other equipment costing $95,000 will be required. What is the amount of the initial cash flow for this expansion project?
Shares of stock? outstanding : If the Marifield Steel Fabrication Company earned $453,000 in net income and paid a cash dividend of $284,000 to its? stockholders, what are the? firm
Apply the principles of operational excellence : Any company, regardless of size, product or service, is one to which you can apply the principles of operational excellence.

Reviews

Write a Review

Finance Basics Questions & Answers

  What is insolvency risk

(a) What is insolvency risk? How can liquidity risk and credit risk cause insolvency? What are the two best protections against insolvency at a financial institution?

  Calculate the present value of the cash flow

For each of the cases shown in the following table, calculate the present value of the cash flow, discounting at the rate given and assuming that the cash flow is received at the end of the periodnoted.

  Compute the amount of sterling''s goodwill impairment

Compute the amount of Sterling's goodwill impairment, if any. How is the goodwill impairment reflected in the financial statements?

  Determining the firm cost of capital

The Yo-Yo Corporation tries to determine the appropriate cost for retained earnings to be used in capital budgeting analysis. The firm's beta is 1.72. The rate on six-month T-bills is 3.20%, and the return on the S&P 500 index is 9.95%. What is th..

  In what respect is given statement misleading

A portfolio manager announces that the average of the returns realized in each year of the last 10 years is 20% per annum. In what respect is this statement misleading?

  What is the speculative premium

The Burma Hat Company's warrant is trading for $10.20. The warrant carries the option to purchase two shares of common stock for $48. What is the speculative premium if the stock price is $51.30?

  If the us congress enacts new environmental legislation

If the US Congress enacts new environmental legislation, upon whom will they rely on to implement the legislation?

  What is the expected earnings and expected retained earnings

Common Stock costs $5 per share to issue, floatation cost for bonds is 5% and the bonds have ten years to maturity. Assume the growth rate in earnings and dividends to be constant over time and the payout rate to be the same as in the previous yea..

  As stated in the audit report or report of independent

as stated in the audit report or report of independent accountants the primary responsibility for a companys financial

  Debt and equity are considered entities

Suppose the given statement by a financial manager: "Since we are financing our new manufacturing facility 100 percent with equity, we must estimate it using a higher rate of return than we would if we financed a portion of the facility with debt."

  How many contracts does the bank need

if a bank will invest $300,000,000 in treasury bonds (par=price) in 3-months. the duration on the bonds is 12.5 year.1) should the bank buy or sell futures?2) if the bank hedges with $100,000 T-bond futures with a duration of 9 years and a current pr..

  What is the net present value of the project

If RWE uses a 10% discount rate to evaluate investments of this type, what is the net present value of the project? What does this NPV indicate about the potential value RWE might create by purchasing the new production line

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