Net present value and irr of the project

Assignment Help Financial Accounting
Reference no: EM132203770

Cat Pharmaceutical is considering a project that requires a new piece of lab equipment that they purchase today for $80,000. It will depreciate on a straight-line basis over 10 years, after which it has a salvage value of $25,000. The new project is expected to produce $50,000 in yearly revenue and $7,500 per year of labor and maintenance, and $10,000 in yearly fixed costs. Revenues and expenses are increased by 3% inflation eachyear. The cost of capital for this type of equipment is 21%. Need is the net present value and IRR of the project.

Reference no: EM132203770

Questions Cloud

What stock price will you receive the margin call : The broker requires a 49% margin and says the margin call will happen at 40%. At what stock price will you receive the margin call?
You are considering starting a clinic : You are considering starting a clinic. Your financial projections for the first year of operations are as follows:
Evaluating two investment projects : Care Cat, Inc., is evaluating two investment projects, each of which requires and up-front expenditure of $1.5 million.
What are the reasons for housing affordability : ECON20039- Economics for Managers - discuss housing affordability crisis in Australia with the demand and supply side factors
Net present value and irr of the project : The cost of capital for this type of equipment is 21%. Need is the net present value and IRR of the project.
Significant marketing campaign from your internship brand : Identify a significant marketing campaign from your internship brand.
Explain the differences between fixed costs : Explain the differences between fixed costs, semi-fixed costs, and variable costs.
Hours of housekeeping services : The patient services departments generated $5 million in total revenues during 2004, and to support these clinical activities, used 5,000 hours of housekeeping
What are the total operating cash flows : Question: What are the total operating cash flows, given the following operating cash flows

Reviews

Write a Review

Financial Accounting Questions & Answers

  Retained earnings and total stockholders equity

CEO Josh Borke is considering either (1) a 15% stock dividend or (2) a 2-for-1 stock split. He asks you to show the before-and-after effects of each option on (a) retained earnings and (b) total stockholders' equity.

  Explain the accounting for convertible preferred stock

Describe the accounting for the issuance, conversion, and retirement of convertible securities.

  Prepare the journal entries that should be made by atwater

Prepare the journal entries that should be made by Atwater and England on July 1, 2009. Ignore fiscal year considerations. What financial statement disclosure should be made by Weather top in its role as a third party guarantor?

  Prefers borrowing at floating rate while non-financial firm

Bank A prefers borrowing at a floating rate while a non-financial firm prefers borrowing at a fixed rate. However, the fixed and floating rate facing the bank is 3% and 3-month LIBOR plus 8 basis points, respectively, while the fixed and the floating..

  Enter the given items in the books

Enter the given items in the books, post to personal accounts, and show the transfers to the General Ledger.- Credit purchases from: K. Hill £380; M. Norman £500; N. Senior £106.

  Journal entries for sold merchandise inventory

Merchandise Inventory on account.  All sales are recorded net of the 2% discount offered by the company.  (Any discounts not eventually taken by the purchaser are recognized as interest income.)  Shipping charges of $450 were paid by the purchaser..

  Prepare the adjusting entry at 31 december 2010

Based on the information given, which method of accounting for bad debts is Lexington Pty Ltd using - the direct write-of method or the allowance method? How can you tell?

  Describe the manufacturing process

Identify what types of trends you should be aware of in the industry and who the primary competitors are.

  The following transactions adjusting entries and closing

the following transactions adjusting entries and closing entries were completed by king furniture co. during a

  The gabriella division is? eliminated

The High School Musical Company has two divisions? - Troy and Gabriella. Troy has a segment margin of? $220,000. Gabriella has a segment margin of? $30,000. Common fixed costs total? $170,000. $50,000 of this amount is allocated to the Gabriella divi..

  Evaluate and calculate a companys weighted average cost

Evaluate and calculate a companys weighted average cost of capital and use the analysis to make company investment decisions.

  The portfolio of trading securities

The portfolio of trading securities had a cost of $200,032 and a fair value of $188,000, requiring a credit balance in Valuation Allowance for Trading Investments of $12,032 ($200,032 - $188,000). Thus, the debit balance from December 31, 2016, is to..

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