Research to develop a new computer game
Course:- Financial Management
Reference No.:- EM13942964

Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Financial Management

KADS, Inc., has spent $300,000 on research to develop a new computer game. The firm is planning to spend $100,000 on a machine to produce the new game. Shipping and installation costs of the machine will be capitalized and depreciated; they total $40,000. The machine has an expected life of three years, a $65,000 estimated resale value, and falls under the MACRS 7-year class life. Revenue from the new game is expected to be $500,000 per year, with costs of $150,000 per year. The firm has a tax rate of 39 percent, an opportunity cost of capital of 13 percent, and it expects net working capital to increase by $50,000 at the beginning of the project. What will the cash flows for this project be?

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Financial Management) Materials
Determinants of Interest Rate for Individual Securities The Wall Street Journal reports that the rate on 3-year Treasury securities is 5.90 percent, and the 6-year Treasury ra
A japanies firm imports electric machines from Italy. Paying after three months in Euros, what should the japanies firm do to hedge its foreign exchange risk? A US firm import
A European option gives its owner the right to exchange two shares of Stock R for a share of Stock S at the end of 9 months. The value of this option is $8.96. The continuousl
Options The exercise price on one of Flanagan Company's options is $15, its exercise value is $22, and its time value is $7. What are the option's market value and the price o
Zane Corporation has an inventory conversion period of 56 days, an average collection period of 36 days, and a payables deferral period of 31 days. Assume 365 days in year for
You plan to save for your retirement by depositing 15 payments of $10,000 into an account every other year. The first payment is made one year from today and the remaining 14
Jasper is bequeathed a thirty year deferred annuity that has a payment at the end of each third year. The first payment is for $15000 and is made five years after she receives
Portfolio Return At the beginning of the month, you owned $6,200 of Company G, $8,500 of Company S, and $2,000 of Company N. The monthly returns for Company G, Company S, and