What is the present value of working capital expenditures

Assignment Help Financial Management
Reference no: EM132072657

What is the present value of working capital expenditures if a project entails a working capital expenditure of $100,000 immediately, which is recovered in 2 years? Would your answer be closer to zero if the working capital was recovered in 3 years instead of 2 Assume the tax rate is 10% and the opportunity cost of capital is 6%.

Reference no: EM132072657

Questions Cloud

Investment will make special payment : What is X, the amount of the special payment that will be made to Sasha in 4 years?
Expected to produce regular annual cash flows : A coffee shop is expected to produce regular annual cash flows of 45,609 dollars with the first regular cash flow expected later today
How much is pet care center worth : Liam owns a pet care center that has a cost of capital of 13.15 percent. How much is Liam's pet care center worth?
What is the present value of the cash flows : Your company is launching a product that will generate cash flows for 20 years. What is the present value of the cash flows if the discount rate is 7%?
What is the present value of working capital expenditures : What is the present value of working capital expenditures if a project entails a working capital expenditure of $100,000 immediately,
What is hemingway current average tax rate : What is Hemingway's current annual corporate tax liability? What is Hemingway's current average tax rate?
What is hemingway current annual corporate tax liability : What is Hemingway's current annual corporate tax liability? What is Hemingway's current average tax rate?
What is effective annual interest rate : What is the effective annual interest rate(EAR) if a bank charged you 10 percent annually (APR) with quarterly compounding?
What is the overall capitalization rate-debt coverage ratio : You are considering the purchase of a quadruplex apartment building. What is the debt coverage ratio? What is the overall capitalization rate?

Reviews

Write a Review

Financial Management Questions & Answers

  Difference in principle pay down is between two methods

what the difference in principle pay down is between the two methods at year ends 2018?

  What must expected return on the market be

A stock has an expected return of 0.09, its beta is 1.14, and the risk-free rate is 0.04. What must the expected return on the market be?

  What is the marginal cost of the 80 percent loan

What is the marginal cost of the 80 percent loan? What does this mean?- Does each loan offer favorable financial leverage? Which would you recommend?

  New york plans to hedge its exposure with forward contract

New York plans to hedge its exposure with a forward contract that it will arrange today. Assume that interest rate parity exists.

  Life insurance policy with flexible premium payments

considering purchase of life insurance policy with flexible premium payments and interest rate credited to savings is tied to current market interest rate

  What is the duration of bank commercial loan portfolio

What is the duration of the bank's commercial loan portfolio?

  About the shares outstanding

Rose Water Corp.'s net income last year was $311.86 million. The company has 103.83 million shares outstanding.

  Decrease in the value of firm other things equal

Which of the following will result in an decrease in the value of a firm, other things equal?

  Stock mutual fund and rest invested in risk less asset

What is the portfolio beta if 75% of the portfolio is invested in a stock mutual fund and the rest invested in risk less asset?

  Short-term debt increase without pushing its current ratio

How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 1.8?

  Income statement preparation-evaluate financial performance

Income Statement Preparation: On December 30,2015, Cathey Chen, a self employed CPA, completed her first full year in business. During the year, she billed $360000 for her accounting services. She had two employees, a bookkeeper and a clerical assist..

  What is present value of the free cash flows projected

Brandtly Industries invests a large sum of money in R&D; as a result, What is the present value of the free cash flows projected during the next 4 years?

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