What is the net present value of this project

Assignment Help Finance Basics
Reference no: EM133111350

Dog Up! Franks is looking at a new sausage system with an installed cost of $411,500. This cost will be depreciated straight-line to zero over the project's seven-year life, at the end of which the sausage system is expected to be sold for $35,000 cash. No bonus depreciation will be taken. The sausage system will save the firm $129,400 per year in pretax operating costs, and the system requires an initial investment in net working capital of $22,500. All of the net working capital will be recovered at the end of the project. The tax rate is 23 percent and the discount rate is 13.2 percent. What is the net present value of this project?

Reference no: EM133111350

Questions Cloud

How much is the expected total capital of the partnership : Geralyn made a cash investment amounting to P80,000. Given this information, how much is the expected total capital of the partnership
Considerations for effective working capital management : How does working capital management differ from capital management?
Proposed new capital structure : ABC Corp. is an unlevered firm and has an annual EBIT of $450,000 that is estimated to last in perpetuity. ABC Corp. has an unlevered cost of capital of 12% and
How much can the buyer spend on new merchandise : If a department has planned purchases for a month of $60,000 at retail, and there is a markup of 40%, how much can the buyer spend on new merchandise at cost?
What is the net present value of this project : Dog Up! Franks is looking at a new sausage system with an installed cost of $411,500. This cost will be depreciated straight-line to zero over the project's sev
Find project discounted payback period : You have just started your new position as a finance manager is Visible Inc. Your colleague presents you with the following cash flows of a proposed project (al
Explain the personal financial advisor : If you were a personal financial advisor, how would you advise a 30 year old couple to plan for retirement if they had made no plans for retirement yet and had
What is the purpose of a petty cash fund : What is the purpose of a petty cash fund? Name 3 principles of internal control. Explain each in 1-2 sentences
How much is the bonus given to Jfenix : Jfenix will be given a bonus of 10% of net income after interest, salary and bonus. How much is the bonus given to Jfenix

Reviews

Write a Review

Finance Basics Questions & Answers

  Which of the following constraints have slack

If you could add one hour of capacity to any department to increase profit - adding one hour of capacity to which department would generate the biggest increase in profit: Forming, Hardening, or Deburring? Which of the following constraints have s..

  Impacts of covid 19 on us real estate market

What are the impacts of COVID 19 on U.S. real estate market?

  Determining the interest on retirement savings

A couple will retire in 50 years; they plan to spend about $30,000 a year in retirement, which should last about 25 years.

  Determining the simple random sample

In a pulse rate research, a simple random sample of 81 men results in a mean of 75 beats per minute, and a standard deviation of 12 beats per minute. Based on the sample results, the researcher concludes that the pulse rates of men have a standard..

  What is the total amount of interest paid

What is the amount of each payment? What is the total amount of interest paid? How does the total interest paid compare with the principal of the loan?

  Productivity and effectiveness of a team

Explain how team dynamics can affect the productivity and effectiveness of a team.

  Written assignment-choosing a capital structure

You are in a discussion with your financial and operations managers and are considering a new debt instrument (issuing a bond) to raise money for a major upgrad

  How much money will kathleen have at the end of 6 years

Mr. Madoff promises that the account will pay 4 percent simple interest each year. How much money will Kathleen have at the end of 6 years?

  Calculate fcfs as ebit

When calculating NPV - why do you calculate FCFs as EBIT(1-t)/(1+WACC)^n rather than Net income/(1+WACC)^n where net income takes into account interest expense.

  What is boogle worth today when it has no leverage

Boogle is back and has no debt! Boogle has an equity Beta of 1.6, with market expected return of 10% and a risk free rate of 3%.

  How much will lillia and ryan owe in prorated expenses

The seller has already paid $15,078.15 in property taxes for the coming year. How much will Lillia and Ryan owe in prorated expenses?

  What is the total amount that she will need to pay

What is the total amount that she will need to pay at the end of year 4? (round off all answers to 2 decimal places)

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