What is the npv of project

Assignment Help Finance Basics
Reference no: EM133110837

You will use the following information to answer 3 different questions (I will repeat it again, but it is the same information; only the question at the end is different). A project requires the purchase of an asset with an initial cost of $500,000. The project will have a life of 8 years. The asset will be depreciated with a CCA rate of 20% and it is expected to be sold at $60,000 at the end of the project. Sales revenues are expected to be $90,000 per year over the course of the project. Variable costs will be 15% of sales revenue and fixed costs are expected to be $15,000 per year. The firm also needs to invest $20,000 in net working capital at the beginning of the project, which will be recovered when the project ends. $10,000 has been spent in the last month projecting the profitability of the new asset. Assume that the tax rate is 30% and the WACC is 10%. What is the NPV of this project?

Reference no: EM133110837

Questions Cloud

What is the option premium : A 6-month put option on Smith Corp.'s stock has a strike price of $45 and sells in the market for $8.90. Smith's current stock price is $41.
Npv of the project : Consider a firm that has invested in a 5-year project. It faces a 40% corporate tax rate and its investment belongs to the CCA class with a 30% depreciation rat
What is the expected return : What is the expected return (expressed in %) of a portfolio that has $7500 in Stock M and $5000 in Stock N? Assume the following three scenarios: Recession (wit
What are the tax implications to both a and the corporation : A also loans the corporation $1,000,000 at 10% per year, What are the tax implications to both A and the corporation
What is the npv of project : You will use the following information to answer 3 different questions (I will repeat it again, but it is the same information; only the question at the end is
What is the net present value of the investment in furnace : A new furnace for your small factory is being installed right now, will cost $28,000, What is the net present value of the investment in furnace
How much cash would it have generated : Last year Emery Industries had $450 million of sales and $225 million of fixed assets, so its Fixed Assets/Sales ratio was 50%. However, its fixed assets were u
Develop a research question that you have about the claim : Discuss how the scientific method could be used to test your research question as compared to one of the other methods mentioned in the module
Calculate jensen alpha for the fund : You have been asked to analyze the performance of an equity portfolio which is measured against a leading equity benchmark. A summary of the statistics provided

Reviews

Write a Review

Finance Basics Questions & Answers

  What are the advantages and disadvantages of raising capital

What are the advantages and disadvantages of raising capital through international bonds? Please refer to at least 3 appropriate academic references.

  Forecast net cash flows for st paul co

Forecast net cash flows for St. Paul Co. under each of the three exchange rate scenarios. Explain how St. Paul's projected net cash flows are affected by possib

  What will be the effects of an increase in real output

What will be the effects of an increase in the money supply on the interest rate? What will be the effects of an increase in real output on the interest rate?

  What was keys last dividend

Keys Inc's stock has a required rate of return of 10%, and it sells for $40 per share. Keys' dividend is expected to grow at a constant rate of 7% per year. What was Keys' last dividend, D0? Show your work and/or inputs used on financial calculato..

  What is the irr for project

If the tax rate is 22 percent, what is the IRR for this project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal

  Employees of commercial banks in malaysia

With the help of examples, discuss FOUR (4) aspects of the code of conduct stipulated by Bank Negara Malaysia which govern all employees of commercial banks in

  Computation of firm''s weighted average cost

Computation of firm's weighted average cost of capital considering marginal tax rate and what is the firm's weighted average cost of capital.

  After a 5-for-1 stock split strasburg company paid a

after a 5-for-1 stock split strasburg company paid a dividend of 1.75 per new share which represents a 14 increase over

  What are the two labor demand shifters

What can cause the labor supply curve to bend backward?

  The requirement of this assignment is to determine an

i am only looking for people who give me some type of proof of their competency with regards to real estate value so

  Average company capital structure

If Congress increased the personal tax rate on interest, dividends, and capital gains but simultaneously reduced the rate on corporate income, what effect would this have on the average company's capital structure?

  What is the market value of the property

If a certain property is put up for sale, there is a 50% chance it will sell for $900,000 and a 50% chance it will sell for $1,100,000.

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