Additional after tax cashflow

Assignment Help Financial Management
Reference no: EM131054543

The firm is considering the purchase of a new machine. The machine costs $31,500 and will produce an after-tax cash flow of $5481 per year at the end of each of the next 9 years, and an additional after tax cashflow at year 9 of $1000. What is the project IRR?

Reference no: EM131054543

Questions Cloud

What is the dollar amount of dividends-owning the stock : Lee purchased a stock one year ago for $27. The stock is now worth $30, and the total return to Lee for owning the stock was 0.40. What is the dollar amount of dividends that he received for owning the stock during the year?
Return on equity -equity multiplier and profit margin : Quixote Industries currently has $6 million in debt for every $10 million in equity. Assume the firm uses some of its cash to decrease its debt while maintaining its current equity and net income. Which of the following will not change as a result of..
Cost of preferred equity if floatation costs are ignored : The market price of the firm’s preferred stock is $116.00. The preferred pays a 12.1% annual dividend on its $100 par value. Floatation costs are $4 per share. What is the cost of preferred equity if floatation costs are ignored?
Find the new stock price after press release : Say share price currently $50 per share, 1 million shares outstanding. The firm issues a press release indicating that the firm has accepted a project with NPV=$3.6 million. Assume that investors agree with the firm’s estimate of the project NPV. Fin..
Additional after tax cashflow : The firm is considering the purchase of a new machine. The machine costs $31,500 and will produce an after-tax cash flow of $5481 per year at the end of each of the next 9 years, and an additional after tax cashflow at year 9 of $1000. What is the pr..
Calculate the firms operating cash flow : The firm has an after- tax cost of capital of 12%, and its tax rate is 40%. Last year the firm had $12 million of sales, with operating margin of 28%, while depreciation expense was $800,000, and interest expense $200,000. The firm had capital employ..
Some mix of long-term debt and common equity : The firm has an equity multiplier of 2.7. The firm’s assets are financed with some mix of long-term debt and common equity. What is the company’s debt ratio?
Issues bonds to public for financing of various projects : Every government collects taxes from people and also issues bonds to public for its financing of various projects and schemes. Hence, if the government cannot repay bonds it will collect money in the taxes and will use such money for repaying bonds.
The percentage return on the investment : If an investor buys shares in a no-load mutual fund for $33.10 and the shares appreciate to $43.30 in a year. a) what would be the percentage return on the investment? If the fund charges an exit fee of 1 percent, what would be the return on the inve..

Reviews

Write a Review

Financial Management Questions & Answers

  Expected to pay the dividends

Apocalyptica Corporation is expected to pay the following dividends over the next four years: $6.80, $17.80, $22.80, and $4.60. Afterwards, the company pledges to maintain a constant 5.75 percent growth rate in dividends, forever. If the required ret..

  What is the yield to maturity for the bond

A bond has a par value of $1,000, pays $50 semi-annually and has a maturity of 10 years. If the bond earns 12% per year, what is the price of the bond? What is the yield to maturity for the bond? What would be the bond's price if the rate earned decl..

  What is marginal tax rate and average tax rate

New Hope Managed Care Inc., is a for-profit managed care company that serves the southwest United States. Last year, it reported $1,200,000 in income from operations, $250,000 in interest income from bonds it bought in the previous year, and $60,000 ..

  Project requires an initial cash outlay

A project requires an initial cash outlay of $95,000 and has expected cash inflows of $20,000 annually for 9 years. The cost of capital is 10%. What is the project’s IRR?

  What is his annual rate of return on this stock

Will has been purchasing $25,000 worth of New Tek stock annually for the past 15 years. His holdings are now worth $598,100. What is his annual rate of return on this stock?

  Make appropriate and powerful connections in case featured

Assuming that the Gannett acquisition goes through, estimate CCR’s short-term (1 ½ years) and long-term (4 ½ years) funding needs. How much of each funding need must be met through external financing? Include all necessary financial calculations (if ..

  About spending your entire life working

You are not thrilled about spending your entire life working. So, you have decided that you will save $5 thousand a year, starting at the end of this year, and retire as soon as you can accumulate $1 million. If you can earn an average of 7.89 percen..

  Acquired knowledge of time value of money

Give an example of how your newly acquired knowledge of Time Value of Money (TVM) calculations could better prepare you for the next negotiation or big-ticket purchase in your life.

  What amount should be used as the initial cash flow

Marshall's & Co. purchased a corner lot in Eglon City five years ago at a cost of $640,000. The lot was recently appraised at $670,000. At the time of the purchase, the company spent $30,000 to grade the lot and another $3,200 to build a small buildi..

  Considering buying security that makes annual payments

You are considering buying a security that makes annual payments (to you) that grow by 1% per year forever, with the first payment made one year from today and in the amount of $2. Your required return is 6% per year for this security. How much shoul..

  Analysis of proposed ambulatory surgery center costing

Assume that your organization's chief financial officer (CFO) has just completed a presentation to the board of trustees concerning the analysis of a proposed ambulatory surgery center costing $2 million. The project is financially unacceptable becau..

  What is the dollar return on the stock investment

Your next assignment is to assume that $10,000 was invested in the stock of General Medical Corporation with the intention of selling after one year. The stock pays no dividends, so the entire return will be based on the price of the stock when sold...

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