What is the project NPV

Assignment Help Accounting Basics
Reference no: EM133021664

Question - Crane Lumber, Inc., is considering purchasing a new wood saw that costs $45,000. The saw will generate revenues of $100,000 per year for five years. The cost of materials and labor needed to generate these revenues will total $60,000 per year, and other cash expenses will be $10,000 per year. The machine is expected to sell for $1,400 at the end of its five-year life and will be depreciated on a straight-line basis over five years to zero. Crane's tax rate is 34 percent, and its opportunity cost of capital is 10.30 percent. What is the project's NPV? Should the company purchase the saw?

Reference no: EM133021664

Questions Cloud

What is the present value of the cost of leasing : What is the present value of the cost of leasing if the lease payment are an annuity due, so the first payment comes immediately
What are the net operating cash flows in years : The sprayer's base price is $1,030,000, and it would cost another $18,000 to install it. What are the net operating cash flows in Years 1, 2, and 3
How large will the cost per working hour be : In the coming year, it is estimated to work and charge customers a total of 12,000 hours, How large will the cost per working hour be
How much should you be willing to pay for the stock : The stock will then reach $33 per share. How much should you be willing to pay for the stock if you require a 15 percent return
What is the project NPV : Crane's tax rate is 34 percent, and its opportunity cost of capital is 10.30 percent. What is the project's NPV? Should the company purchase the saw
What was its ROI : ScoMo Ltd reported a profit margin during the year of 25%, an investment turnover of 30% and a leverage ratio of 50%. What was its ROI
What is the maximum price you should be willing to pay : If you require a 9.0% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond
What is the NAV per share on December : The fund borrowed $2,000 on December 21 st, 2020 from a bank to meet withdrawal requirement. What is the NAV per share on December 31 st, 2020
What are the two main inventory systems : Question - What are the two main inventory systems? How do these methods allow a business to track inventory properly

Reviews

Write a Review

Accounting Basics Questions & Answers

  What is the amount of cash receipts from customers

Columbia Sportswear Company had accounts receivable of $206,024,000 at the beginning of a recent year, and $267,653,000 at year-end. Sales revenues were $1,095,307,000 for the year. What is the amount of cash receipts from customers?

  Data breach response-capital project

What protocols should Bullzeye implement in order to enhance their response in the event of a data breach? Be sure to consider the lessons learned from data breaches at the national retailers regarding the effectiveness of their response plans.

  Identify the problem and create a problem statement

Identify the problem and create a problem statement? Your CEO has come to you and asked you to research an issue regarding the company's employee stock program.

  Analyze the audit report that the cpa firm issued

Analyze the audit report that the CPA firm issued. Ascertain the legal liability to third parties who relied on financial statements under both common and federal securities laws. Justify your response.

  Prepare the journal entry to record the stock dividend

On June 13, the board of directors of Siewert Inc. declared a 5% stock dividend on its 60 million, $1 par, common shares, to be distributed on July 1. The market price of Siewert common stock was $25 on June 13. Prepare the journal entry to record th..

  What value should west report as the book value

In its June 30, 2011, balance sheet, what value should west report as the book value or carrying value of the bonds payable

  What is the budgeted materials purchases

The October 1 inventory for this material is 8,000 pounds. What is the budgeted materials purchases for this key material in pounds for October

  What will be the depreciation expense for the machine

Salvino Industries purchased a piece of equipment on January 1, 2015 for $42,750. What will be the depreciation expense for the machine

  Evaluate the report prepared by the book keeper

Problem - Critiquing a Report, Preparing a Performance Budget, Evaluate the report prepared by the book keeper

  Calculate the price of a firm with a plowback ratio

An investor is in a 28% tax bracket. If corporate bonds offer 9% yields, what must municipal offer for the investor to prefer them to corporate bonds?

  Performance award and special commendation award

Two Types of Awards: Performance Award and Special Commendation Award

  Calculate daily gross profit

Reconcile daily cash drawer receipts( cash,debit, card sales,credit sales) with daily sales) with daily sales for one week. calculate daily gross profit

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