Reference no: EM131007859
Thomson Media is considering some new equipment whose data are shown below. The equipment has a 3-year tax life and would be fully depreciated by the straight-line method over 3 years, but it would have a positive pre-tax salvage value at the end of Year 3, when the project would be closed down. Also, some new working capital would be required, but it would be recovered at the end of the project's life. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's NPV?
WACC 10.0%
Net investment in fixed assets (depreciable basis) $70,000
Required new working capital $10,000
Straight-line deprec. rate 33.333%
Sales revenues, each year $75,000
Operating costs (excl. deprec.), each year $30,000
Expected pretax salvage value $5,000
Tax rate 35.0%
|
Problem regarding the appropriate discount rates
: M&M Proposition 1: Dynamo Corp. produces annual cash flows of $150 and is expected to exist forever. The company is currently financed with 75 percent equity and 25 percent debt. Your analysis tells you that the appropriate discount rates are 10 p..
|
|
That first credit card
: In "That First Credit Card," what decisions could Ms. McLeod have made differently to avoid ending up in the situation she ultimately faced? When you faced similar choices, what decision did you make and what has or will be the results of those decis..
|
|
Difference between the mean standardized growth of genes
: Treat the data for the ?rst 10 genes as a random sample collected from the population of 103 genes and test the hypothesis of no difference between the mean standardized growth of genes in the full-dark condition and genes in the transient light c..
|
|
Corporate cause promotion and cause-related marketing
: What are the major differences between corporate cause promotion and cause-related marketing? Explain the major differences between the two different initiatives.
|
|
What is the project npv
: Also, some new working capital would be required, but it would be recovered at the end of the project's life. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's NPV?
|
|
How your views on literature have changed since taking class
: Write a 2+ page reflective paper on how your views on literature have changed since taking the class
|
|
More relevant when making production decisions
: Which of the following types of costs is more relevant when making production decisions? a) Marginal costs b) Sunk costs c) Fixed costs d) Average costs
|
|
What is the project year 1 cash flow
: The required equipment has a 3-year tax life, after which it will be worthless, and it will be depreciated by the straight-line method over 3 years. Revenues and other operating costs are expected to be constant over the project's 3-year life. Wha..
|
|
How long it take for oxygen concentration to reach sag value
: After solving parts A and B, assign the following parameter values and then use differential calculus to determine how long it will take for the oxygen concentration to reach the "sag" value.
|