What is the projects npv and irr

Assignment Help Corporate Finance
Reference no: EM13200220

Temple Corp. is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated by the straight-line method over its 3-year life, and would have a zero salvage value. New working capital of $6,000 is required for inventory. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's NPV and IRR?

WACC

10%

Net investment cost (depreciable basis)

$65,000

Straight-line depreciation

3 years

Sales revenues, each year

$65,500

Operating costs (excl. deprec.) each year

$25,000

Working Capital for inventory

$6,000

Tax Rate

35%

a. NPV = $17,832 ; IRR = 23.89%

Reference no: EM13200220

Questions Cloud

How many times the mass of saturn is the mass of the sun : If saturn is 5.688*10^23 and the sun is 1.998*10^27, how do I find how many times the mass of saturn is the mass of the sun?
Fine the arc length of an arc intercepted by a central angle : fine the arc length of an arc intercepted by a central angle of .769 radian on a circle with radius 11.4.
Determine the rate of change of the length : Pete walks at the rate 5 ft/sec toward a street light whose lamp is 20 ft above the base of the light. If Pete is 6 ft tall, determine the rate of change of the length of Pete's shadow at the moment he is 24 ft from the base of the lamppost.
Explain the elevation of death valley : the elevation of Death Valley, California. If Death Valley is 282 ft below sea level, find the elevation of Mount Whitney.
What is the projects npv and irr : Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's NPV and IRR?
How fast are the the two ships approaching : At noon, ship A is 65 km due north of ship B. Ship A is sailing south at 14 km/hr and ship B is sailing east at 16 km/hr. How fast are the the two ships approaching each other 5 hours later at 5:00?
Determine when the us stock market crashes : Using the S/D of $ and S/D of ¥ (yen), answer the following questions. Make sure to draw both graphs. a. What happens to the p (price) and q (quanity) of $ and of ¥ when the Japanese demand more ipods b. What happens to the p (price) and q (quanity) ..
Find probability of a doctor correctly diagnosing a child : Suppose past experience shows that 5% of school-age children in a certain geographic region have Attention Deficit Disorder (ADD). Assume that the probability of a doctor correctly diagnosing a child as having ADD is 77%
What is the volume of the remaining ring : A manufacturer drills a hole through the centre of a metal sphere of radius 5cm. The hole has radius 3cm. What is the volume of the remaining ring?

Reviews

Write a Review

Corporate Finance Questions & Answers

  Impact of the global economic crisis on business environment

This paper reviews the article of ‘the impact of the global economic crisis on the business environment' that is written by Roman & Sargu (2011).

  Explain the short and the long-run effects on real output

Explain the short and the long-run effects on real output, price, and unemployment

  Examine the requirements for measuring assets

Examine the needs for measuring assets at fair value in accounting standards

  Financial analysis report driven by rigorous ratio analysis

Financial analysis report driven by rigorous ratio analysis

  Calculate the value of the merged company

Calculate the value of the merged company, the gains (losses) to each group of shareholders, NPV of the deal under different payment methods. Synergy remains the same regardless of payment method.

  Stock market project

Select five companies for the purpose of tracking the stock market, preparing research on the companies, and preparing company reports.

  Write paper on financial analysis and business analysis

Write paper on financial analysis and business analysis

  Intermediate finance

Presence of the taxes increase or decrease the value of the firm

  Average price-earnings ratio

What is the value per share of the company's stock

  Determine the financial consequences

Show by calculation the net present value for the three alternatives (no education, network design certification, mba). Also, according to NPV suggest which alternative you advise your friend to choose

  Prepare a spread sheet model

Prepare a spread sheet model for the client that determines NPV/IRR with and without tax.

  Principles and tools for financial decision-making

Principles and tools for financial decision-making. Analyse the concept of corporate capital structure and compute cost of capital.

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