What is the present worth of all disbursements

Assignment Help Financial Management

Reference no: EM131071056

What is the present worth of all disbursements and receipts during the life time of the project, evaluated at the beginning of the first year, if the project has the following costs: Phase 1 labor $2700000 (per year paid at the end of each year) Phase 1 Material $750000 (paid at the end of the first year only Phase 2 -years 4 to 10, all costs are paid at the end of each year and include: Launch $6400000 Insurance $520000 Labor $1750000 Material $830000 The project makes an annual income of $13000000 as a result of sales in phase 2. Hint: The present value of the net cash flow of phase 2, evaluated at the beginning of first year, must be greater than the sum of the present worth of labor and material costs of phase 1, also evaluated at the beginning of first year. The difference would be the answer to this problem. Make sure to include the sign (-) if the answer is negative. Remember, if the present worth of all disbursements and receipts is positive, the company will make at least 25% annual return on this investment.

Reference no: EM131071056

Questions Cloud

Implement goal of providing safe and caring environment : Provide examples of three value-added support strategies geared toward helping a nursing home to implement a goal of providing a safe and caring environment for its residents.

Accounts comply with the appropriate accounting standards : Accounting standards are now awash with principles of ‘fair value' and tiers of determining how to calculate such. Auditors sign off that the accounts comply with the appropriate accounting standards.

Managed care pharmacy benefits : What is managed care pharmacy benefit program, essentially? And how are patient prescription benefits different under managed care?

Formulating contingency plans for outpatient surgical center : In the health care industry, change occurs quickly and many times without warning. In an effort to address such changes, contingency planning is a key step in the strategic planning process. Contingency planning follows a 7-step process to achieve..

What is the present worth of all disbursements : What is the present worth of all disbursements and receipts during the life time of the project, evaluated at the beginning of the first year, if the project has the following costs: Phase 1 labor $2700000. Remember, if the present worth of all disbu..

How is long-term care facility management different : How is long-term care facility management different from other types of facility management - In your OWN opinion, which would you prefer to manage? Why?

Net cash flow and sum of material and labor cost of phase : With the present values of phase 1 material and labor costs of $610000 and $5080000, respectively, and phase 2 net cash flow of $7930670, will the company make a minimum 25% return on this investment?

Function and purpose of a grant proposal : What are the function and purpose of a grant proposal? From what you have read about grant writing and program planning thus far, what specific skills do you feel a grant writer needs to have? What specific skills do you feel a program planner nee..

Determine the write-off rustin : Rustin bought used, 7-year class property on May 15, 2014, for $500,000. Rustin elects Section 179 and straight-line cost recovery. Rustin's taxable income would not create a limitation for purposes of the Section 179 deduction.

User Account

All Pages