What is the present value of the net cash flow

Assignment Help Financial Management
Reference no: EM131928914

A company XYZ is considering manufacturing a product in space.

The project lifetime is 10 years and has the following consecutive phases:

Phase 1 (years 1 to 3): The engineering design and development requires 3 years. No production is done during this period

Phase 2 (years 4 to 10): to launch the spacecraft into orbit, operate the equipment from the ground by remote control, and recover the spacecraft with the product. This phase is completed in one year, and will be repeated for the next 6 years for a total of 7 launches. All costs are paid at the end of each year.

1. If the annal net cash flow of phase 2 is $6100000 per year, what is the present value of the net cash flow when evaluated at the beginning of phase 2 (year 4)? Note that phase 2 is 7 years.

Reference no: EM131928914

Questions Cloud

How does given experience influence what you investigate : How does this experience influence (1) what you investigate; (2) how you investigate it; and (3) what resources you use to interpret what you investigate?
Start to attract considerable investment funds : Which life cycle stage generally sees industries improving their products, lowering prices, and start to attract considerable investment funds?
Steps associated with making decisions within in health care : Identify the steps associated with making decisions within in health care - What types of conflict were present among the employees in the home health company
Final year project of bachelor degree : What are possible topics for the final year project of Bachelor Degree ? Please suggest more topics and give the main functions.
What is the present value of the net cash flow : what is the present value of the net cash flow when evaluated at the beginning of phase 2 (year 4)?
The relationship between business and society : How do expect your role in both business and society to change because of the knowledge you acquired in this course?
Explain the functional areas of human resources : Select one (1) of the following functional areas of Human Resources that you would consider pursuing as a career: Employment, Employee Relations.
Discuss about different storage devices : Discuss about different storage devices, how they are accessed (what protocols) and how to apply them to a storage design.
The risk free rate- average market return : The risk free rate is 5%.the average market return is 12%.The beta of the asset is 1.

Reviews

Write a Review

Financial Management Questions & Answers

  What amount of trust assets will be included in gross estate

In 2005, Joe who is 75 years old, created a 10 year GRAT into which he transferred $1 million of securities. Joe’s basis in the securities is $250,000. At the time Joe transferred the assets into the GRAT, the IRC Sec. 7520 rate was 4.8%. What amount..

  What is yield to maturity of the bond

A municipal bond with a coupon rate of 5.60 percent sells for $4,890 and has eight years until maturity. What is the yield to maturity of the bond?

  What is your real rate of return

You purchase 100 shares of stock for $40 a share. What is your real (inflation-adjusted) rate of return if the inflation rate is 8%?

  The price of treasury strip note or bond

The price of a Treasury strip note or bond can be found using Appendix C toward the back of the text. It is simply the present value factor from the table times the maturity (par) value of the Treasury strip. What is the price (present value) of the ..

  What is your best estimate of aftertax cost of debt

What is the company’s total book value of debt? What is your best estimate of the aftertax cost of debt?

  Current market price-should you purchase the stock

If XYZ's current market price is $40.00, and your required rate of return is 18 percent, should you purchase the stock?

  Describe three questions that studying finance addresses

Describe three questions that studying finance addresses. Explain the incremental cash flow concept and why it is important.

  The time of purchase and an expected salvage value

An equipment company purchased a machine 5 years ago at a cost of $100,000. It had an expected life of 11 years at the time of purchase and an expected salvage value of $10,000 at the end of the 11 years. It is being depreciated by the straight-line ..

  Gross income with respect to foregoing transaction

What must X include in gross income with respect to the foregoing transaction in 2015?

  Compare the cost of the two projects

Compare the cost of the two projects shown below on the basis of their Capitalized costs. Use an interest rate of 10% per year.

  Option pricing their technique to pricing currency options

What additional assumptions must be added to the black and Scholes option pricing their technique to pricing currency options?

  The value of capital is determined

The value of capital is determined by

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