User Account

All Pages

What is the npv for project

Assignment Help Finance Basics
Reference no: EM133058355

Lily Inc., is contemplating the purchase of a new $348,606 glass manufacturing system. Delivery costs for the system will amount to $33,768 and the firm will need to pay an additional $29,402 in modification costs. The firm spent the last six months traveling to several manufacturing plants to analyze various pieces of equipment, which cost the firm $22,559. The system will be depreciated straight-line to zero over its five-year life. The firm plans on salvaging the equipment at the end of four years for $147,147. The new system will increase pre-tax revenues by $187,623 per year, but pre-tax costs will also increase by $53,272 per year. The firm will be able to reduce working capital by $28,470 at the beginning of the project, but will repay this at the end of the project's life. If the tax rate is 35 percent and the discount rate is 6.74%, what is the NPV for this project?

[Round the final answer to the nearest cent]

Reference no: EM133058355

Questions Cloud

Provisions of a hotel management agreement : What are the functional differences between brand management companies and independent management companies?
Standard deviation of abc returns over period : Consider ABC stock with the following returns over the past five years: 17%, -15%, 19%, 29%, and 10%. a. What was the arithmetic average return on ABC stock ove
What is the yield to maturity on a 14-year bond : Vitality Vancouver Inc. (VVI) has recently raised debt capital through long-term financing. The bond indenture includes issuing 8% coupon bonds on the market th
What is meant by the term natural hedge : This "mixed measurement model," consisting of both fair values and historical cost, What is meant by the term "natural hedge"
What is the npv for project : Lily Inc., is contemplating the purchase of a new $348,606 glass manufacturing system. Delivery costs for the system will amount to $33,768 and the firm will ne
Abandoned housing project : Who will suffer due to the abandoned housing project and how to avoid this worse situation? Explain.
What amount is reported on Blue Spruce statement : What amount is reported on Blue Spruce's statement of comprehensive income in 2020 under each of these methods, and where are the amounts reported
What are the claims on the total value : What is the companys total value? What are the claims on the total value?
Compute the rate of return : GoFast Corp. wishes to renovate the property so that he can sell it at a higher price. The after-tax cash flow over next year up to RM320,000 if the property wa

Reviews

Write a Review

Finance Basics Questions & Answers

  What is one share of this stock worth today

What is one share of this stock worth today if the market rate of return on similar securities is 11.5%?

  Determine the payback of the project

A company is evaluating a proposal which has an initial investment of $50,000 and has cash flows of $15,000 per year for 5-years. Determine the payback of the project?

  Which of the two projects should be chosen under the

acme inc. is considering the following two investments both of which cost 50000 today. the firms cost of capital is 8.

  Recalculate the present value

If interest rates are 5%, what is the present value of a $900 annuity payment over three years? Unless otherwise directed, assume annual compounding periods. Recalculate the present value at 10% interest and 13% percent interest.

  Various annual plan control tools

Discuss, giving examples, the various annual plan control tools (or profitability control tools) that can be used by marketing professionals.

  Calculate the next dividend to be paid and back-out

This is a constant growth stock, and you know the price, the last dividend paid, and the growth rate in the dividend. Simply calculate the next dividend to be paid and back-out the required return (discount rate) on the stock. A) 9.78% B)14.8% C)1..

  What is the expected exchange rate for the australian dollar

If the spot market exchange rate for the Australian dollar is 0.7550 and the 6-month forward rate is 0.7520, what is the expected exchange rate for the Australian dollar in six months?

  Activities of securities firms and investment banks

Do you believe that these institutions are becoming more similar or more different over time? Explain.

  What is the cost of the option attached to the bond

McCarty Manufacturing Company makes baseball equipment. The company decides to issue a callable bond that it expects to sell for $840 per bond. If the bond is a twenty-year semiannual bond with a 6% coupon rate and a current yield to maturity of 7%, ..

  Revenues and expenses occur at the end of year

A football team is considering signing a star quarterback to $7 million per year for a total of 5 years with an initial signing bonus of $2.6 million.

  What is the npv and is this a good project

You are considering undertaking a project where a $12 million investment would generate after- tax cash flows of $3 million per year for 5 years.

  Sellzar corporation currently has sales of 100 million and

sellzar corporation currently has sales of 100 million and its marketing department is projecting sales to be 800

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd