What is the terminal value of the project

Assignment Help Finance Basics
Reference no: EM132169111

You are a project manager. You are estimating cash flows of a potential project that requires investment of $250,000 in a machine, including installation cost, and $40,000 in working capital which will be fully captures at the end of the project. The marchine has the estimated life of 5 years and will be depreciated vie simplified straight-line method. The project is expected to raise the firm's revenues by $330,000 and costs by $125,000 annually. Since the trend of the product moves rapidly, you expect to terminate this project in 3 years. In 3 years, the machine you purchase for the project can be sold for $50,000. The firm has the marginal tax rate of 34%. What is the terminal value of the project? Round to the nearest penny. Do not include a dollar sign in your answer.

 

Reference no: EM132169111

Questions Cloud

Implement a point-of-sale system : Point-of-Sale System: We have two companies that can implement a point-of-sale system. Both with cost $200,000 to implement.
What is the net present value of this project : What is the net present value of this project? Round to the nearest penny. Do not include a dollar sign.
Communicate organisational mission and goals : BSBMGT605 Provide leadership across the organisation - Communicate organisational mission and goals - demonstrate knowledge and skills required to communicate
How educational programs within prisons can function : In this reflection paper, discuss the differences and similarities between the four theories of punishment.
What is the terminal value of the project : What is the terminal value of the project? Round to the nearest penny. Do not include a dollar sign in your answer.
Find the company weighted average cost of capital : The company's long-term growth rate of dividends is expected to be 8%. Assuming a 40% tax rate, find the company's weighted average cost of capital (WACC).
Calculate the option profit to the trader : At the expiration, the stock price becomes $31.44. Calculate the option profit to the trader.
Annual cash flow of this project in the second year : What is the annual cash flow of this project in the second year if the tax rate is 40%? Round to the nearest penny.
Describe the health risks associated with stress experienced : Describe the health risks associated with stress experienced by law enforcement personnel.

Reviews

Write a Review

Finance Basics Questions & Answers

  Finding the charge for depreciation and amortization

Patterson Brothers recently reported an EBITDA of $8.5 million and net income of $2.6 million. It had $2.0 million of interest expense, and its corporate tax.

  What is the value of the total assets

A firm has total debt of $1,380 and a debt-equity ratio of 0.23. What is the value of the total assets?

  What is value of share if required return on company shares

NTK just paid a dividend of 1.50 per share. Analysts believe dividends will grow 13% per year for the next 5 years, and at 5% after that. What is the value of a share if the required return on the company's shares is 13%? Enter your answer without..

  Lottery assuming federal tax rate

Suppose that the discount rate is 6%, how much money worth today for the lottery assuming federal tax rate is 25% and state tax is 8%?

  What has been happening to the bank net interest margin

What has been happening to the bank's net interest margin? What do you think caused the changes you have observed? Do you have any recommendations.

  What impact has the documentary made on you

What impact has the documentary made on you? Were you familiar with before watching it now; had you seen it before?

  Is the given price is a reasonable price for the stock

A broker from Slightly Shady Stocks has contacted you with an investment opportunity: share ownership in a company which will pay a dividend of $12.00 per share

  What is the current price

What is the current price?

  Describe the factor categories used by venture

Describe the factor categories used by venture capitalists and other venture investors when they screen venture opportunities for the purpose of deciding to invest.

  Mortgage with monthly payments at an apr

How much must her down payment be in order to stay in her affordable range?

  Determine mira and lemma basis at the end of the period

Mira and Lemma are equal owners of an entity. Each contributed $25,000 cash to the entity. In addition, the entity obtains a loan of $100,000.

  Calculate the required rate of return cost of equity

Using the above data calculate the beta of the firm. If the risk-free rate is 4%, and the market rate of return is 14%, calculate the required rate of return (cost of equity) for the stock usingCAPM.

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