Find NPV of 2 Projects, Financial Management

Assignment Help:
Woody Construction is considering a new 3-year expansion project that requires an initial fixed asset investment of $3.186 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will have a market value of $247,800. The project requires an initial investment in net working capital of $354,000. The project is estimated to generate $2,832,000 in annual sales, with costs of $1,132,800. The tax rate is 31 percent and the required return on the project is 10 percent. What is the NPV for this project?

2. Hot Meats is looking at a new sausage system with an installed cost of $436,800. This cost will be depreciated straight-line to zero over the project''s 5-year life, at the end of which the sausage system can be scrapped for $67,200. The sausage system will save the firm $134,400 per year in pretax operating costs, and the system requires an initial investment in net working capital of $31,360. If the tax rate is 31 percent and the discount rate is 9 percent, what is the NPV of the project?

Related Discussions:- Find NPV of 2 Projects

Decision table, drow decision table of financee managment system

drow decision table of financee managment system

Dividend yield method, Dividend yield method As per this method, the co...

Dividend yield method As per this method, the cost of Equity capital is the discount rate that equates the present value of expected future dividends per share with the net pro

Define coefficient of variation often a better risk measure, Why is the coe...

Why is the coefficient of variation often a better risk measure when comparing different projects than the standard deviation? While we want to compare the risk of investments whi

Define differences between foreign bonds and eurobonds, Describe the differ...

Describe the differences between foreign bonds and Eurobonds.  Also discuss why Eurobonds make up the lions share of the international bond market. Answer:  The two segments of t

Evaluate the annual premium for policy, A with-profit whole life assurance ...

A with-profit whole life assurance policy was issued to a life then aged 25 with: • basic (initial) sum assured of S = $100,000; • bonuses added to sum assured at the end of ea

Determine the circumstances is a warrant’s value high, Under what circumsta...

Under what circumstances is a warrant’s value high?  Explain. A warrant’s value would be high while the stock prices, time to expiration, and/or expected stock price volatility a

Public provident fund, Public Provident Fund (ppf) The Public Provident...

Public Provident Fund (ppf) The Public Provident Fund (PPF) scheme was started in 1968-69 with the aim to provide a financial instrument to workers in the unorganized sector to

Define correlation coefficient for two variables is -1, What does it mean w...

What does it mean when we say that the correlation coefficient for two variables is -1? What does it mean if this value were zero? What does it mean if it were +1? Correlation is

Explain the benefits of delegation from point of view of yt, YT is the Fina...

YT is the Finance Manager of SBM Magazine Publishing Company. He has recently had his appraisal and was expecting that he would get a excellent review, as he felt that he had met a

Viability of project - syringe management, The syringe management program t...

The syringe management program tries to educate society by increasing the capacity and quantity of the syringe disposable centers , providing timely responses to all syringe compla

Write Your Message!

Captcha
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