What is the project npv-sub-prime loan company

Assignment Help Business Management
Reference no: EM133035690

Problem: Sub-Prime Loan Company is thinking of opening a new office, and the key data are shown below. The company owns the building that would be used, and it could sell it for $100,000 after taxes if it decides not to open the new office. The equipment for the project would be depreciated by the straight-line method over the project's 3-year life, after which it would be worth nothing and thus it would have a zero salvage value. No change in net operating working capital would be required, and revenues and other operating costs would be constant over the project's 3-year life. What is the project's NPV? (Hint: Cash flows are constant in Years 1-3.) Do not round the intermediate calculations and round the final answer to the nearest whole number.

WACC

10.0%

Opportunity cost

$100,000

Net equipment cost (depreciable basis)

$65,000

Straight-line depr. rate for equipment

33.333%

Annual sales revenues

$128,000

Annual operating costs (excl. depr.)

$25,000

Tax rate

35%

Reference no: EM133035690

Questions Cloud

Calculate the bonds price today : General Mills has $1,000 par value, 22-year bond outstanding with an annual coupon rate of 7.31 percent per year, Calculate the bonds price today
Business capstone reflection : Reflecting on the process and experiences of putting your business capstone project together and how you have drawn on the learning from your MBA
Explain the intel corporation mission and vision statement : What is the most effective way to explain the Intel Corporation mission and vision statement and summarize how individuals consider these to become elements of
Prepare a complete amortization schedule : Golden Dragon Restaurant obtained a $9,600 loan at 9% compounded annually to replace some kitchen equipment. Prepare a complete amortization schedule
What is the project npv-sub-prime loan company : Sub-Prime Loan Company is thinking of opening a new office, and the key data are shown below. The company owns the building that would be used
Build a multiple regression model : Build a multiple regression model to predict ln(C) by taking S and N or their natural logarithms, as well as CT, as the independent variables.
Create a tally chart : Problem: The following are the times (in minutes) it took an operator to inspect a product
Record the sale of the truck : Sold a truck for Br. 950.00. The truck had been purchased two years ago on January 2 for Br. 2300.00. Record the sale of the truck
Design the solution for the credit card approval : As a credit analyst in a credit card company, you are asked to design a model that will be used for the credit card approval process.

Reviews

Write a Review

Business Management Questions & Answers

  When looking at risks in the project environment

a) When looking at risks in the project environment, why are we concerned with the impact and probability of a potential risk event? b) How could you sort through a long list of risks in a project so that focus is placed on the most important o..

  Discuss site link topology for various enterprises

How are the replication costs monitored? How frequently? What configuration changes might be needed and how frequently?

  How did the leaders demonstrate flexibility and adaptability

How did the leaders demonstrate flexibility and adaptability? Please provide examples. How did the leaders apply aspects of the path-goal theory to this situation? Provide examples.

  Approach to achieving a sustainable competitive advantage

What are the advantages and risks for a firm to adopt this approach. Use recent examples to explain your answer. With in-text citations

  Enhance feelings of group cohesion and trust

Imagine that you are the leader of a team of retail associates at a sports equipment store. What specific actions you would take to enhance feelings of group.

  Incident response at a healthcare company

How does project scope help improving Incident Response at a healthcare company.

  Primary purpose of statement of operations

Explain the primary purpose of statement of operations, and discuss important aspects of that statement. Explain how this statement relates to other key financial statements

  Illustrate what two factors does the agenda-setting strategy

Illustrate what two factors does the agenda-setting strategy focus on? a) Recruiting the agenda setter and building support for an alternative.

  Illustrate the development methodology that was applied

Illustrate the development methodology that was applied to this project. Was this the most appropriate approach? Provide a rationale for your response.

  Why the control environment may be weak at the charity

The charity's income is derived wholly from voluntary donations. Sources of donations include:

  Analyzing a problem describe how this step can be done

Analyzing a problem describe how this step can be done well and how it can be done poorly Give specific examples where possible?

  Toronto stock exchange

Do you think the lemons problem would be more severe for stocks traded on the Toronto Stock Exchange or those traded over the counter? Explain.

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