What is the present value of the projects terminal value

Assignment Help Financial Management
Reference no: EM131194741

You are the financial manager of a firm that is contemplating investing in a new project that you expect will generate cash flows of $10,000 per year for five years and then $15,000 per year for another two years. At the end of seven years you expect to sell the project's assets for $50,000. You believe that you should earn at least 14% to compensate the shareholders for the project's risk.

Step 2: Answer the questions.

Answer the following questions:

Explain the process for evaluating this project.

What is the present value of the project's terminal value?

What is the most that you should pay for this project?

Is this project consistent with the firm's goal assuming you can invest $25,000 in this project?

What is the primary goal of the firm?

Reference no: EM131194741

Questions Cloud

What is the voulme of such an atom : Length scale in physics suppose we model a hydrogen atom as a sphere with a radius of 0.53 A = 5.3 * 10^-11 m . what's the voulme of such an atom? recall that the volume of a sphere is V sphere = 4/3 pi r^3.
Uses straight-line amortization on bond premiums-discounts : Wempe Co. sold $3,235,000, 10%, 10-year bonds on January 1, 2014. The bonds were dated January 1, 2014, and pay interest on January 1. The company uses straight-line amortization on bond premiums and discounts. Financial statements are prepared annua..
Calculate the implied arc income elasticity of demand : A. Calculate the implied arc income elasticity of demand. B. How would you characterize demand for these 50" HDTVs?
Briefly describe the transactional model of communication : Briefly describe Transactional Model of Communication by listing at least 5 parts or labels you would find by looking at its visual depiction. Describe and explain how this model is different from the Linear Model of Communication.
What is the present value of the projects terminal value : You are the financial manager of a firm that is contemplating investing in a new project that you expect will generate cash flows of $10,000 per year for five years and then $15,000 per year for another two years. Explain the process for evaluating t..
What are problematic aspects or areas of your chosen topic : Select one of the above topics and research the following: What are the problematic aspects/areas of your chosen topic. Write a 'literature review' of the topic, that is, what the literature is saying about the topic (by way of researches done by d..
Part of an international trade agreement : Suppose that, as part of an international trade agreement, the U.S. government reduces the tariff on imported coffee. Will this affect the supply or the demand for coffee? Why? Which determinant of demand or supply is being affected? Show graphica..
Which of these statements is not true about copernicus : Knowledge can be gained by philosophical logic and also by experimentation. Which of these did Aristotle favor, and which did Galileo favor?
Accomplishing greatest good for greatest number in society : In the utilitarian sense of accomplishing the greatest good for the greatest number in society, was the Standard Oil Company a net plus or a minus? On balance, did the company meet its responsibilities to society?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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