User Account

All Pages

What is the project profitability index

Assignment Help Finance Basics
Reference no: EM132670129

1. A firm is evaluating a project that yields the following after-tax net cash flows: $7,000 a year for 8 years and -$3,000 at year 9. The project will incur an initial cost of $30,000. The cost of capital for the project is 12%.

a. What is the project's NPV?

b. What is the project's profitability index?

2. A machine that cost $80,000 is expected to have a useful life of 10 years. Its salvage value at the end of the period is estimated to be zero. The machine is expected to save the company $16,000 a year before taxes and depreciation. Depreciation is based on the straight line method. The tax rate is 40%.

a. What is the IRR of the investment?

b. What is the project's payback period?

c. What is the project's discounted payback period?

Reference no: EM132670129

Questions Cloud

How does the final withholding system work : How does the final withholding system work? Who will pay for the tax deficiency in case the tax withheld is less than the tax required?
Question - Complete the table : Complete the table below by recording your answers in the appropriate spaces. Insert a zero if the error does not affect the item
Write a profit statement that highlights the performance : Martini Ltd is organised into three divisions: Metro, Regional and Rural. Data for these divisions for the 2020 financial year end were as follows.
Discuss the benefits of an external audit : Discuss the benefits of an external audit. Next, provide an overview of fundamental principles of the Code of Professional Conduct and Ethics.
What is the project profitability index : A firm is evaluating a project that yields the following after-tax net cash flows: $7,000 a year for 8 years and -$3,000 at year 9. The project will incur an in
Look at the management discussion and analysis section : Find out what capital expenditures it made during the year and what the company's plans are, if any, for the next year.
What transfer price would you recommend : What transfer price would you recommend if there was no outside market for the partially processed component and Crater Division had spare capacity?
How much interest income will Dylan recognize : Dylan purchased all of the bonds on their issuance date. How much interest income will Dylan recognize for regular tax purposes in the current year
Compute for the issue price of the bonds : On January 1, 20x1, an entity issues 14%, 3-year, P5,000,000 bonds at a price that reflects a yield rate of 8%. Compute for the issue price of the bonds.

Reviews

Write a Review

Finance Basics Questions & Answers

  Shares of stock should be sold for company

How many shares of stock should be sold for company to net= $20 million after costs also expenses

  What is the economic ordering quanity how many orders will

fisk corporation is trying to improve its inventory control system and has installed an online computer at its retail

  Financial data and strategic decision making

Financial Data and Strategic Decision Making - An evaluation of the sources of financial data which can be used to inform business strategy

  Determining the net present value

A business is considering purchasing a piece of new equipment for $100,000. The equipment will generate the following revenues:

  Probability of a stock out and the magnitude of a stock out

Explain why you think this observation is either true or false. Describe how such a shift could benefit the operations of the entire channel and how manufacturers could take advantage of the shift.

  Customer survey for each market region

Customer Survey for each market region as a cross-tabulation (use pivot tables as appropriate), along with frequency distribution, histograms, and quatiles of these data.

  What is the duration of a perpetual bond

What is the duration of a perpetual bond that pays $90 per period if the appropriate yield-to-maturity is 6% per period?

  Abe forrester and three of his friends from college have

abe forrester and three of his friends from college have interested a croup fo venture capitalists in backing their

  Explain the valuation process

There is both an Acquisition and Valuation Process that an organization will undertake. Explain the valuation process in detail and secondly, compare and contrast the business valuation approaches.

  Private residence in pennsylvania

Suppose that you are a lender and that you have issued a loan on a private residence in Pennsylvania. The borrower has defaulted on this mortgage

  How the initiative affects the organization financial plan

My bullet is How the initiative affects the organization's financial planning

  For the purposes of this exercise assume the following data

please complete the following for joersquos fly-by-night oil company whose financial statements are shown belowbull

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd