Profitability index for project

Reference no: EM13213242

Phone Home, Inc. is considering a new 4-year expansion project that requires an initial fixed asset investment of $3 Million. The fixed asset will be depreciated using the three year MACRS after which time it will have a market value (salvage value) of $231,000. The project requires an initial investment in net working capital of 330,000 and no additional net working capital throughout the project. The project is estimated to generate 2,640,000 in annual sales, with costs of 1,056,000. The tax rate is 30 % and the required return for the project is 15%. What is NPV, IRR, Payback, and Profitability Index for this project ?

Reference no: EM13213242

Questions Cloud

Explain chromium and manganese and barium : Chromium, Manganese, and Barium are all examples of metals that can be prepared in a pure form by combining oxides of these elements with reactive metals

Determine equilibrium output and selling price for each firm : Assume that two companies (C and D) are duopolists that produce identical products. Demand for the products is given by the following linear demand function: P=600-QC-QD QC and QD are the quantities sold by the respective firms and P is the sellin..

Define would equilibrium market price increase or decrease : For each of the determinants of demands, identify an example illustrating the effect on the demand for hybrid gasoline-electric vehicles such as the Toyota Prius. Then do the same for each of the determinant of supply. In each instance.

Find out the energy change that occurs : determine the energy change that occurs during the combustion of 1 mole of ethene (ethene's connectivity is: H2C=CH2 also written as CH2=CH2).

Profitability index for project : The project is estimated to generate 2,640,000 in annual sales, with costs of 1,056,000. The tax rate is 30 % and the required return for the project is 15%. What is NPV, IRR, Payback, and Profitability Index for project ?

Explain how many calories are present in a snickers : snickers bar holds 1.17 megajoules of energy. How many large calories or Calories are present in a snickers bar?

Analyze the structures of the compounds : Examine the structures of the following compounds. What functional groups can you identify within the compounds? (They may have more than one.) What structural features do many of these compounds have in common?

What would be the price of corporate bond : If there is no change of default what would be the price of this corporate bond and there was a default-free bond with the same cash flows as the corporate bond described above, what would its price be?

Write the equation for the total cost function : The Jenkis Tool Company estimated the following demand equation for it's product: QD=12,000-4,000 P Where P=price/unit QD=quantity demanded/year The firm's total costs are $4,000 when nothing is being produced.

User Account

All Pages