User Account

All Pages

What is the npv of the project

Assignment Help Finance Basics
Reference no: EM132622486

You are considering constructing a new plant in a remote wilderness area to process the ore from a planned mining operation. You anticipate that the plant will take a year to build and cost $100 million upfront. Once built, it will generate cash flows of $15 million at the end of every year over the life of the plant. The plant will be useless 20 years after its completion once the mine runs out of ore. At that point you expect to pay $200 million to shut the plant down and restore the area to its pristine state. Using a cost of capital of 12%,

A. What is the NPV of the project?

b. Is using the IRR rule reliable for this project?

c. What is the IRR of this project? Find the non-zero IRR.

Reference no: EM132622486

Questions Cloud

Compute cost of goods sold assuming bramble uses : Compute cost of goods sold, assuming Bramble uses: (Round average cost per unit to 4 decimal places, e.g. 2.7631 and final answers to 0 decimal)
What is the firm after-tax cost of debt : If the firm's marginal tax rate is 40%, what is the firm's after-tax cost of debt? Round your answer to 2 decimal places. Do not round intermediate calculations
Calculate cost of the ending inventory and the cost of sales : Fenning Pty Ltd reports the following for the month of June. Calculate cost of the ending inventory and the cost of sales under FIFO, LIFO and average cost
Secure windows applications policy : What functions should this software application provide? What functions should this software application prohibit?
What is the npv of the project : You are considering constructing a new plant in a remote wilderness area to process the ore from a planned mining operation. You anticipate that the plant will
Calculate the amount of inventory purchased : If all inventory purchases are purchased and paid for in the current month, calculate the amount of inventory purchased and paid for in September.
How is roe and eps used in evaluating the value of a company : How is ROE and EPS used in evaluating the value of a company? How is ROE and EPS calculated? Why is understanding ROE and EPS important to a company's value?
What do you view as strengths of the program and why : Locate one community health promotion initiative within your local community. Discuss the goals, implementation, and evaluation of the program.
Calculate the inventory turnover ratio : Calculate the inventory turnover ratio, days in inventory and gross profit ratio (from chapter 4) for BJ Electronics Ltd for 2015, 2016 and 2017

Reviews

Write a Review

Finance Basics Questions & Answers

  What kind of holder is harry

Question: What kind of holder is Harry? Ordinary or a holder in due course and why. Question: Will John's defense be successful?

  Calculate the real rate of return on the stock

You purchased 1,000 shares of stock for $23 per share exactly one year ago. During the year, the stock paid a $.50 dividend per share and the current stock price is $20 per share. The inflation rate the last year was 2%.

  Confidence interval estimate of the proportion

Construct a? 99% confidence interval estimate of the proportion of all human resource professionals believing that body piercings and tattoos

  Enforceability of the promise

On June 1, 2014, Newman, owner of H & H Bagels, met with Abe Farkas in his office to discuss the possibility of Farkas working at H &H. Newman told Farkas that if Farkas accepted a job offer, Newman would guarantee him three years of employment so..

  Calculate the beta for the new project-polycorp

Polycorp is considering a new project. The project has beta (ß) that is twice that of the firm's existing assets (projects). Polycorp's existing assets

  Mutual fund corporate bond holdings

The 20% balance is allocated to interest paid on the mutual fund's corporate bond holdings. George is in the 35% tax bracket.

  Impact of 9/11 on the american economy

Assess The Impact of September 11, 2001 on 4-section of American Economy. Examine the effects upon selected four segments of the American economy as a result of these attacks

  Pick out the projects that the firm should accept

If projects D and E are mutually exclusive, how would that affect your overall answer? That is, which projects would you accept in spending $60,000?

  Discuss some of techniques available to reduce risk exposure

Give two reasons stockholders might be indifferent between owning the stock of a firm with volatile cash flows and that of a firm with stable cash flows.

  Select the best project and explain your decision

Your task is to select the best project and explain your decision. The methods are presented and the decision each indicates is given below.

  Discussion-understanding financial statements

In this assignment, you will learn to read and interpret financial statements. Understanding the four financial statements provided.

  Find the future values of fv of $400 and annuities described

Find the future values of the following ordinary annuities: a. FV of $400 each 6 months for 5 years at a nominal rate of 12 percent, compounded semiannually. b. FV of $200 each 3 months for 5 years at a nominal rate of 12 percent, compounded quarterl..

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