What is the net present value of the project

Assignment Help Financial Accounting
Reference no: EM133010617

Question - Pfizer Pharmaceutical Company may spend $60,000 on COVID-19 testing equipment. This device is estimated to save healthcare personnel $20,000 per year in labor expenditures. Although the equipment has a five-year useful life, it is classified as a three-year property for cost recovery (depreciation) purposes. At the end of the day, no salvage value is predicted. Pfizer pays a total federal and state corporate tax rate of 38 percent, with a 15 percent minimum rate of return. (If the project's profits after taxes are negative in any given year, the loss will be offset against other firm revenues for that year.) What is the net present value of the project based on this information? Is it acceptable?

Reference no: EM133010617

Questions Cloud

Research the events in the case study : Research the events in the case study above, and apply flexible budget variance techniques to calculate the variances of Whateva Ltd for direct materials
Briefly explain the accounting assumption of going concern : Briefly explain the accounting assumption of 'going concern'. Why is it of interest to auditors
What the price of the call option : The put is currently selling for $4.54. Assume that a year is 365 days. According to the put-call parity, what the price of the call option
Compute total present value of all expected future cash flow : The Company requires a minimum rate of return of 18% p.a. Compute the total present value of all expected future cash flows
What is the net present value of the project : Question - Pfizer Pharmaceutical Company may spend $60,000 on COVID-19 testing equipment. What is the net present value of the project
Calculate the contribution margin and breakeven point : Assume that two companies, Brake, Inc. and Carbo, Inc., have the following operating results: Calculate the contribution margin and breakeven point
Development of solutions for identified workplace problems : What is 1 (one) advantage and 1 (one) risk involved in the development of solutions for identified workplace problems?
Part of the consultation process : 1. Imagine that you are planning a consultation event in your organisation as part of a change program to introduce the change project of Australia Post.
Different terms used to identify native americans : 1. What are the different terms used to identify Native Americans? 2. In what year did the Native Americans granted citizenship rights?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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