Calculate NPV and MIRR of pulley project

Assignment Help Financial Management
Reference no: EM13721932

When considering including two pieces of equipment, a truck and an overhead pulley system, in this year's capital budget. The projects are independent. The cash outlay for the truck is $17,400, and that for the pulley system is $20,200. The firm's cost of capital is 13.50%. After-tax cash flows, including depreciation, are as follows:

Year    Truck      Pulley

1     $4,500           $9,300     

2     $4,500           $9,300     

3     $4,500           $9,300     

4     $4,500           $9,300     

5     $4,500           $9,300     

a. Calculate MIRR of truck project.

b. Calculate NPV and MIRR of pulley project

Please Show Work

Reference no: EM13721932

Questions Cloud

Saving for retirement plan beginning : Your job pays you only once a year for all the work you did over the previous 12 months. Today, December 31, you just received your salary of $53,000 and you plan to spend all of it. However, you want to start saving for retirement beginning next yea..
Explain the effectiveness of the project : In your opinion, are there any ethics violations in these three scenarios? For each scenario, is there a way to avoid the ethics conflict? What do you see as the legal ramifications of your alternatives on the effectiveness of the project? Will th..
What is the equivalent annual annuity of machine : Company A is considering the replacement of its old, fully depreciated knitting machine. Two new models are available: Machine 190-3, which has a cost of $219,000, a 4-year expected life, and after-tax cash flows (labour savings and depreciation) of ..
Describe the differences between objective claims : Question 1: Describe the differences between objective claims from subjective claims. Question 2: Describe subjectivism as it relates to moral claims
Calculate NPV and MIRR of pulley project : When considering including two pieces of equipment, a truck and an overhead pulley system, in this year's capital budget. The projects are independent. The cash outlay for the truck is $17,400, and that for the pulley system is $20,200.
Balance sheet is principally current market value : The valuation basis of the Balance Sheet is principally current market value.___ ‘Retained Earnings’ reflects cumulative net income kept in the business.___ Current Liabilities are obligations due to be paid within a year of the Balance Sheet date.__..
Two pieces of equipment-truck and overhead pulley system : If considering adding two pieces of equipment, a truck and an overhead pulley system, in this year's capital budget. The projects are independent. The cash outlay for the truck is $17,400, and that for the pulley system is $20,200. The firm's cost of..
Determine the ethics of the term paper service : Use the ethical decision making model process to determine the ethics of the term paper service. Provide 3-5 APA style references both inline and at the end of the paper to support your analysis. Note: This is your opportunity to demonstrate your k..
Determine the maximum compressive load it could support : The connecting link is machined from 1020 steel as-rolled. Determine the maximum compressive load it could support assuming a factor of safety = 3

Reviews

Write a Review

 

Financial Management Questions & Answers

  The make a way foundation has run in the financial crisis

The Make a Way Foundation has run into a financial crisis. Halfway into their fiscal year, the financier has realized that the company has not put enough money aside to cover all of their costs for the children's summer expense project.

  You are to submit a detailed plan covering your operations

nbspyoyu are to submit a detailed plan covering your operations both nationally and internationally in addition to the

  What is the return expected on investment measured

What is the return expected on investment measured in dollar terms if the opportunity cost rate is 10 percent and provide an explanation, in economic terms, of your answer.

  What is the relationship between diversification and firm

1 how does corporate strategy differ from business strategy?2 how has the practice of corporate strategy evolved over

  Q1amulroney did not use working capital cash flows in her

q1amulroney did not use working capital cash flows in her original analysis. the analysis aboveincludes incremental

  Determine net present value of the investment

The added production would require an increase in working capital in the form of stocks, valued at cost, of £300,000. The tax rate is 20 per cent and the required rate of return is 18 percent. Determine the net present value of the investment, sp..

  Discuss the possible reasons why the english common law

Discuss the possible reasons why the English common law tradidon provides the strongest protection of investors and the French civil law tradition the weakest.

  Calculate the cost of capital for rio tinto

Calculate the cost of capital for Rio Tinto and state two reasons for why it may have declined since the GFC. Justify your answers using theory, calculations and research into current events.

  Evaluate the depreciation on the building

Evaluate the depreciation and what was Happe's Interest Expense on the bond during fiscal year 2012? What was Andersen Telecom's depreciation expense for tax purposes in fiscal year 2012?

  Explain the government contracts with a trust to pay

A local government is about to run a lottery but does not want to be involved in the payoff if a winner picks an annuity payoff. The government contracts with a trust to pay the lump-sum payout to the trust and have the trust (probably a local ban..

  Should a company pursue price hike or focus

Should a company pursue price hike or focus on increasing sales volume

  Choosing a streaming media service

Instead of immediately committing to one choice, you can take each service for a "test drive" to see which one you prefer - Price makes a big difference when it comes to choosing a streaming media service. Fortunately, all of the services are priced..

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