What is the projects net present value

Assignment Help Finance Basics
Reference no: EM13304566

A project is expected to create operating cash flows of $22,500 a year for three years. The initial cost of the fixed assets is $49,000. These assets will be worthless at the end of the project. An additional $2,000 of net working capital will be required throughout the life of the project. What is the project's net present value if the required rate of return is 12 percent?

Reference no: EM13304566

Questions Cloud

What is amount of last dividend paid by weisbro and sons : Weisbro and Sons common stock sells for $21 a share and pays an annual dividend that increases by 6 percent annually. The market rate of return on this stock is 9 percent. What is the amount of the last dividend paid by Weisbro and Sons?
How long would trip take according to an earthbased observer : A star is about 6.00 light years from Earth. How long would the trip take according to an Earth based observer
Legal and business questions began surface : Company outsourcing has always been and will always be a controversial issue. Ethical, legal and business questions began surface.  Although all the answers are not clear, many employees want to know, what about me!
What amount should be used as the initial cash flow : The company now wants to build a new retail store on the site. The building cost is estimated at $1,250,000. What amount should be used as the initial cash flow for this building project?
What is the projects net present value : An additional $2,000 of net working capital will be required throughout the life of the project. What is the project's net present value if the required rate of return is 12 percent?
Find the energy density at the center of the loop : A circular loop of wire 66 mm in radius carries a current of 102 A. find the energy density at the center of the loop
How many years is it until this bond matures : The Lo Sun Corporation offers a 7 percent bond with a current market price of $873.35. The yield to maturity is 8.34 percent. The face value is $1,000. Interest is paid semiannually. How many years is it until this bond matures?
What is the voltage across the output circuit : A transformer has an input coil with Nin = 200 turns and Nout = 850 turns. what is the voltage across the output circuit
What is the corresponding range of wavelengths : The dial on an AM radio contains numbers ranging from about 530 to about 1600. What is the corresponding range of wavelengths

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the payout ratio

Neil Diamond Brokers, Inc., reported earnings per share of $4.00 and paid $.90 in dividends. What is the payout ratio?

  What are two critical operating assumptions

What are two critical operating assumptions (identify one for profits, and one for capital) embedded in this forecast method?

  Which does almost all of the photocopying for the sales

Bullock's Company's copy department, which does almost all of the photocopying for the sales department and the administrative department, budgets the following costs for the year, based on the expected activity of 5,000,000 copies.

  How much would you be willing to pay to purchase it

Given the following cash flow pattern, how much would you be willing to pay to purchase it? Assume an 8% APR discount rate.

  How much of the option premium

You have taken a long position in a call option on IBM common stock. The option has an exercise price of $136 and IBM's stock currently trades at $140. The option premium is $5 per contract.

  Explain what are two critical operating assumptions

What are operating profits and invested cpital expected to be next year? What are two critical operating assumptions (identify one for profits, and one for capital) embedded in this forecast method?

  Calculate the year

Calculate the YEAR.

  What is the benefit of the remodeling project

Heartland Insurance has agreed to pay an additional $81,943 a year in rent for the next 6 years. The discount rate is 0.1. What is the benefit of the remodeling project to Professional Properties?

  Compute the average daily float

Suppose you are planning to save for $140,000 Ferrari. You have $30,000 to invest and your bank pays 4.2% annual interest. How long before you have enough to buy the car?

  Calculate the maximum amount for investment

An investment is expected to generate $2,000,000 every year for four (4) years. If the firm's cost of funds is 5 percent,

  Would they be better served by evaluating investments

Could it be that they are actually doing the numerical analysis but not in a formal way that financial analysts and managers at larger companies might do?

  The estimated cash flows

If the cost of capital is 9% and an investment costs $56,000, should you make this investment if the estimated cash flows are $5,000 for years one through three,

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