What is the NPV of project

Assignment Help Financial Management
Reference no: EM132011716

Kolby's Korndogs is looking at a new sausage system with an installed cost of $910,000. This cost will be depreciated straight-line to zero over the project?s seven-year life, at the end of which the sausage system can be scrapped for $105,000. The sausage system will save the firm $193,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $51,000. Required: If the tax rate is 30 percent and the discount rate is 6 percent, what is the NPV of this project?

Reference no: EM132011716

Questions Cloud

What is the breakeven price of the equipment : What is the breakeven price of the equipment? (What price of the equipment will make the NPV equal zero?)
Dropped so low due to current economic condition : You want to purchase a new car since the prices have dropped so low due to the current economic condition.
What is the combined present value of these cash flows : What is the value of your retirement plan after the 50 years? What is the combined present value of these cash flows?
Discuss the various payoff systems : Discuss the various payoff systems.State and explain how CAPM has been extended to allow for additional determination of excess returns
What is the NPV of project : Kolby's Korndogs is looking at a new sausage system with an installed cost of $910,000. what is the NPV of this project?
Purchase of automated pill machine that fills prescriptions : Hilltop pharmacy is considering the purchase of an automated pill machine that fills prescriptions.
What constant rate is stock expected to grow : Carnes Cosmetics Co.'s stock price is $73.61, and it recently paid a $1.00 dividend. At what constant rate is the stock expected to grow after Year 3?
How much would the sales price need to be to break even : Find the break even point ? how much would the sales price need to be to break even?
What are the reasons for international capital markets : What are the reasons for international capital markets? Explain each reason.

Reviews

Write a Review

Financial Management Questions & Answers

  How do these values change for the second payment

What is the dollar amount of each payment Jan receives? How do these values change for the second payment?

  What are Duffert ROE and ROIC

The firm's basic earning power ratio is 15% and its debt-to capital rate is 40%. What are Duffert's ROE and ROIC?

  Other things held constant would that have on bond prices

what effect, other things held constant, would that have on bond prices and interest rates?

  What rate of interest should you expect during second year

Assume that the expectations theory holds, and that liquidity and maturity risk premiums are zero. If the annual rate of interest on a 2-year Treasury bond is 10 percent and the rate on a 1-year Treasury bond is 12.5 percent, what rate of interest sh..

  What is the project payback period if the initial cost

An investment project provides cash inflows of 200, 400, 670, 890, 1130, 1040, 880, 740, 530, 200, 110, 30 each year starting in year 1. What is the project payback period if the initial cost is $5,600? this must done in excel.

  Analyze the capital asset pricing model

Analyze the Capital Asset Pricing Model (CAPM). Using the course text and an article from ProQuest as references, address the following: Explain how the CAPM assists in measuring both risk and return. Identify the benefits and drawbacks of using the ..

  Calculate hillary front-end and back end ratios

Hillary would like to purchase a $125,000 home, and is planning on making a $25,000 down payment for a 7.5 percent, 30-year, fixed-rate mortgage. Calculate Hillary' s front-end and back- end ratios.Given these figures, will Hillary meet the income gu..

  Before tax cash flow is obtained by

Which of the following is NOT a requirement of the 1031 exchange? Before tax cash flow is obtained by.

  Shares outstanding and cost of capital

If Newerks has 5 million shares outstanding and a cost of capital of 14%, what is Newerks stock price at the end of 2016?

  Draw the optimal cal and calculate its sharpe ratio

Draw the optimal CAL and calculate its Sharpe ratio.

  What are portfolio weights of each stock

what are the portfolio weights of each stock?

  State and local tax

Client maintains a website, theme being lifestyles for individuals (an information center on recreation, quality of life, dining, theatre, etc.) Client's customer base are restaurants, playhouses. etc. The service they provide to their clientele is a..

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