What is the npv of this project

Assignment Help Finance Basics
Reference no: EM133557831

Boolarloo Sausage Shop is looking at a new sausage system with an installed cost of $460 000. This cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the sausage system can be scrapped for $55 000. The sausage system will save the firm $155 000 per year in pretax operating costs and the system requires an initial investment in net working capital of $29 000. If the tax rate is 30 per cent and the discount rate is 10 per cent, what is the NPV of this project?

Reference no: EM133557831

Questions Cloud

What are two important factors consumers should look for : What are two important factors consumers should look for when shopping around for a bank? Explain why these factors are choosing the right ban
Explain which funding mechanism states prefer : How do they demonstrate fiscal federalism? Explain which funding mechanism states prefer. Which funding mechanism does the federal government prefer? Why?
Define visual art and its purposes : Define visual art and its purposes. Discuss why people create art and how we benefit from it. Identify the types of media used in visual arts (such as painting,
What is the return on capital employed by alpha : What is the return on capital employed by Alpha Metallurgical Resources, Inc? NOTE: The return must be the operating income!
What is the npv of this project : initial investment in net working capital of $29 000. If the tax rate is 30 per cent and the discount rate is 10 per cent, what is the NPV of this project
Describe the three evidence-based low-tech solutions : Describe the three evidence-based "low-tech solutions" that can help increase active student responding. Outline a specific outcome from one study
How would you invest in government bonds or cds : How would you invest in government bonds or CDs from your bank. What are the risk, potential return, diversification, investment horizon, and other many other
Why do you think this information is important to know : personal financial principles you should know and you think other people should know. Why do you think this information is important to know
Discuss how you see the global impacting your local society : Discuss how you see the 'global' impacting your 'local' society. Watch ted talk "Behind the great firewall of China" and "Historic Moment in Arabic World"

Reviews

Write a Review

Finance Basics Questions & Answers

  Public relations income statement

The restaurant paid for $1800 of the bill from public relations Inc. on April 20, 2009. The remaining balance was paid on May 5, 2009. How did these transactions affect public relations income statement for the month of April and for the balance s..

  What maximum growth rate can abbai achieve

To support its future growth, the firm plans to raise some debt from creditors while keeping its debt-equity ratio unchanged. What maximum growth rate can Abbai achieve?

  The investment in net working capital

A 5-year project requires an initial investment of $400,000 in fixed assets. It also requires an initial investment of $100,000 in net working capital and an additional investment of $20,000 at the end of year 2 in net working capital. The investment..

  Zippy corporation just purchased computing equipment for

zippy corporation just purchased computing equipment for 27000. the equipment will be depreciated using a five-year

  What is the maximum profit per share

You sell 1 call option on ABC stock with an exercise price of $155.00. You were paid $14.00 for this call option.

  Money market securities valuation

Importance of day count approach in money market securities valuation?

  Create a personal financial portfolio

For this assignment, you will take on the role of a personal financial advisor and create a personal financial portfolio

  The adjusted trial balance of pacific scientific

the adjusted trial balance of pacific scientific corporation on december 31 2013 the end of the companys fiscal year

  How to check the claims out on the web

A guest speaker visiting your class contends that Bank of America is one of the most profitable banks of its size in the United States.

  Calculate the exact crossover point between project a and b

Using cost of capital, as a financing and reinvestment rate, calculate MIRR for each project. If A&B profiles cross, calculate the exact crossover point between project A & B. Which of the three projects, if any, should be accepted and why?

  What are your opinions on the use of npv vs irr in making

what are your opinions on the use of npv vs irr in making capital allocation decisions?nbsp please be specific.discuss

  What is the firm wacc and total corporate value

If it decreases leverage the cost of equity would be 10.5%. What is the firm's WACC and total corporate value under each capital structure?

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