Calculate the irr

Assignment Help Accounting Basics
Reference no: EM131006078

You are considering constructing a new plant to manufacture a new product. You anticipate that the plant will take a year to build and cost $100 million upfront. Once built, it will generate cash flow of $15 million at the end of every year over the life of the plant. The plant will wear out 20 years after its completion. At that point you expect to get $10 million in salvage value for the plant. Using a cost of capital (interest rate) of 12%, calculate the present Worth of the plant. Calculate the IRR.

Reference no: EM131006078

Questions Cloud

Case brief - roberts vs century contractors inc : CASE BRIEF ASSAIGNMENT. Case - Roberts v. Century Contractors, Inc. 592 S.E.2d 215
Prbolem regarding the consumer buying behavior : Short Paper Assignment: Consumer Buying Behavior . Write a one-page paper addressing the points below in paragraph format. Use these bullets as a checklist.
Monopolist has zero marginal cost and faces the demand curve : Suppose a monopolist has zero marginal cost and faces the following demand curve: Graph the demand curve, the marginal revenue curve, and the rm's marginal cost curve. Calculate the monopolist's price and output if she cannot engage in any type of pr..
Prepare a statement of cash flows for the year 2014 for aero : Use the analysis of Aero to illustrate how information in the balance sheet and statement of cash flows helps the user of the financial statements.
Calculate the irr : The plant will wear out 20 years after its completion. At that point you expect to get $10 million in salvage value for the plant. Using a cost of capital (interest rate) of 12%, calculate the present Worth of the plant. Calculate the IRR.
What is the lessees discount rate : What is the lessor's discount rate when determining the present value of minimum lease payments? What is the lessee's discount rate?
Beach with retirement funds : Joe is 55 and plans to retire and move to Aruba where he could live comfortably on a beach with retirement funds of $750,000. He recently inherited $400,000 that he safely invested at 6% annual interest compounded monthly.
Different products can sometimes price discriminate : A monopolist selling several different products can sometimes "price discriminate" by bundling products together. Here's an example. Suppose the university is planning to offer a series of two concerts. The first program in the series consists of mus..

Reviews

Write a Review

Accounting Basics Questions & Answers

  Net realizable value of receivables-financial statements

The practice of reporting the net realizable value of receivables in the financial statements is commonly called:

  Caliente company uses process costing at the beginning of

caliente company uses process costing. at the beginning of the month there were 3000 units in process 70 complete with

  What does this data indicate about the company

A company shows common size comparisons for two years on balance sheets. There is almost a two-fold increase in cash and equivalents, a 3% decrease in inventories, a small decrease in net property and equipment, and a large increase in retained ea..

  What is the difference between an implicit cost

What is the difference between an implicit cost and an explicit cost?

  Cridwell companys selling and administrative expenses for

cridwell companys selling and administrative expenses for last year totaled 210000. during the year the companys

  Common and preferred stock issuances and dividends

Common and preferred stock issuances and dividends. Permabilt Corp. was incorporated on January 1, 2013, and issued the following stock for cash:4,000,000 shares of no par common stock were authorized;

  If total liabilities increased by 20000 during a period of

if total liabilities increased by 20000 during a period of time and owners equity increased by 5000 during the same

  Accounting important questions

Dave Ganz started a sole proprietorship by depositing $30,000 cash in a business checking account. During the accounting period the business earned $6,000 of net income and Ganz withdrew $2,000 cash from the business.

  How many boxes does gentry expect to purchase

Gentry Company produces speaker systems for trucks. Estimated sales (in units) in January are 20,000; in February 25,000; and in March 22,000. Each unit is priced at $45. Gentry wants to have 25% of the following month's sales in ending inventory.

  The management of serpas corporation is considering the

the management of serpas corporation is considering the purchase of a machine that would cost 120000 would last for 4

  Analyze thenarrative to prepareadjusting entries and record

Analyze thenarrative to prepareAdjusting Entries and record themto the T-accountsandtheworksheet.

  Computer equipment was acquired at the beginning of the

computer equipment was acquired at the beginning of the year at a cost of 67944.00. the computer equipment has an

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