What is the NPV of the project

Assignment Help Accounting Basics
Reference no: EM133135172

Question - Your firm is contemplating the purchase of a new $630,000 computer-based order entry system. The system will be depreciated straight-line to zero over its six-year life. It will be worth $42,000 at the end of that time. You will be able to reduce working capital by $37,000 at the beginning of the project. Working capital will revert back to normal at the end of the project. Assume the tax rate is 40 percent.

Required -

1: Suppose your required return on the project is 8 percent and your pretax cost savings are $192,000 per year. What is the NPV of the project?

2: Suppose your required return on the project is 8 percent and your pretax cost savings are $132,000 per year. What is the NPV of the project?

Reference no: EM133135172

Questions Cloud

Specialized individual that conducts operation : Do they close the project, or do they have a specific or specialized individual that conducts this operation?
Challenging country for an expatriate : Choose a country - if possible, one that you have personal experience with. Explain why, in your opinion, this would be a challenging country for an expatriate
ACCA40525 Corporate Finance Assignment : ACCA40525 Corporate Finance Assignment Help and Solution, Nottingham Trent University - Assessment Writing Service
How many units must the company sell to break even : How many units must the company sell to break even, if the variable costs of sale are $1.40 per unit, the variable costs of production per unit are $23.56
What is the NPV of the project : Suppose your required return on the project is 8 percent and your pretax cost savings are $192,000 per year. What is the NPV of the project
Leadership strategy best practices : Throughout this program, you have examined the many ways in which quality leadership can bring forth powerful outcomes for organizations.
In what ways can the airline integrate empathy : In what ways can the airline integrate empathy into its dealings with both employees and customers? Do you think it would make a difference
Prepare a schedule to determine the amount of loss : Based on the previous information, prepare a schedule to determine the amount of loss that Wells should recognize for the current year
Prepare journal entries to record lance brothers investment : Prepare the journal entries (a) to record Lance Brothers' investment in the bonds on July 1, 2021, and (b) to record interest on December 31, 2021

Reviews

Write a Review

Accounting Basics Questions & Answers

  Discuss problem related to the sharpe measure

Congratulations! Your portfolio returned 11% last year, 2% better than the market return of 9%. Your portfolio's return had a standard deviation equal to 18%.

  Who are the stakeholders in this case

Barry Yellen, CPA, is a sole practitioner. The largest audit client in his office is Rooster Sportswear. Who are the stakeholders in this case

  How an audit committee could improve effectiveness

Explain how an audit committee could improve its effectiveness on internal auditor's internal control review and oversight work.

  What is the impairment loss and depreciation

On January 1, 2019, Pesci Company purchased an equipment at a cost of P3,760,000. What is the impairment loss for 2019? What is the depreciation for 2019?

  What is Timber Ridges net profit margin

The Timber Ridge Company has the following relationships: Sales/Total assets = 3.88; ROA = 0.1050. What is Timber Ridge's net profit margin

  If net fixed assets in 2007 19550 if net fixed assets in

if net fixed assets in 2007 19550 if net fixed assets in 2008 28974 if depreciation on the 2007 income statement is

  Prepare the entry required to reflect the transfer of funds

Determine and Prepare the entry required to reflect the transfer of funds from the General Fund to the Debt Service Fund. and discuss the term general fund mean

  What the ramifications for a company for unethical behavior

What are the ramifications for a company for unethical behavior from an accounting professional? What is the role of financial accounting

  Deducting for a contribution to a traditional ira

Sammy, age 31, is unmarried and is not an active participant in a qualified retirement plan. His modified AGI is $55,000 in 2010. The maximum amount that Sammy can deduct for a contribution to a traditional IRA is:

  Distinguish between b2b sales and b2c sales

Distinguish between B2B sales and B2C sales. Other than those presented in this chapter, name a company from your personal experience that uses B2C sales.

  What are at least three performance metrics

Based on the data collected, what are at least three performance metrics Henry could develop to measure his strategic objective to efficiently produce meals

  Prepare the journal entries

Prepare the journal entries

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