User Account

All Pages

What is the effect on project npv

Assignment Help Accounting Basics
Reference no: EM131028225

A project currently generates sales of $12 million, variable costs equal to 60% of sales, and fixed costs of $2 million. The firm's tax rate is 50%. The project will last for 10 years. The discount rate is 12%.

a-1. What is the effect on project NPV, if sales increase from $12 million to $12.8 million? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)

a-2. What is the effect on project NPV, if variable costs increase to 70% of sales? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places. Enter your answer as the absolute value of the change.)

b. If project NPV under the base-case scenario is $2 million, how much can fixed costs increase before NPV turns negative? (Do not round intermediate calculations. Enter your answer in dollars not in millions. Round you answer to the nearest dollar amount.)

c. How much can fixed costs increase before accounting profits turn negative? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)

Reference no: EM131028225

Questions Cloud

How many points are there in the sample space : Two balls are to be selected without replacement from a bag containing one red, one blue, one green, one yellow, and one black ball. How many points are there in the sample space?
Significant contemporary management theories : Type a full 2-page (minimum) double spaced paper using 12 point font to: Explain how the four contemporary approaches to management are different from one another. Define “open systems” and describe the internal, competitive, and macroenvironments of..
Problem regarding the federal income tax return : Many college students choose not to file a federal income tax return (!) assuming that the income taxes withheld by employers "probably" will cover their tax liability. Is such an assumption correct?
What were economic profits : Ralph's Travel Agency had accounting profits of $50,000 and implicit costs of $30,000. What were economic profits?
What is the effect on project npv : What is the effect on project NPV, if variable costs increase to 70% of sales? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places. Enter your answer as the absolute value of the change.)
Evaluate primary source based on historical accuracy : For this essay you will: Find a fictional primary source that is a representation of a historical event or time period, Reflect on primary source and Evaluate primary source based on historical accuracy/authenticity
What is the probability that the player wins a game of craps : If the player does not win or lose on the first toss, he tosses the dice repeatedly until he obtains either his point or a 7. He wins if he tosses his point before tossing a 7 and loses if he tosses a 7 before his point. What is the probability th..
What is the effect on project npv : What is the effect on project NPV, if variable costs increase to 70% of sales? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places. Enter your answer as the absolute value of the change.)
Use of technology in developing countries-what challenges : What opportunities do you see for the use of technology in developing countries? What challenges? Use specific examples discovered in your readings or research during this course.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Reorganizations and consolidated tax returns

Suppose you are a CPA, and you have a corporate client that has been operating for several years. The company is considering expansion through reorganizations.

  Erroneously to repairs expense

Kentucky Enterprises purchased a machine on January 2, 2010, at a cost of $120,000. An additional $50,000 was spent for installation, but this amount was charged erroneously to repairs expense. The machine has a useful life of five years and a sal..

  Compute the proper earnings per share for 2010

During the year 2010, the corporation earned $600,000 after deducting all expenses. The tax rate was 30%., Instructions:- Compute the proper earnings per share for 2010.

  Identify several areas in business operations

Identify several areas in business operations where weakness in control over data may occur. Then, determine which can do the most harm to the organization. Provide your rationale.

  How will any marital deduction be determined

Bernice dies and, under a will, passes real estate to her surviving husband. The real estate is subject to a mortgage. For estate tax purposes, how will any marital deduction be determined? Can Bernice's estate deduct the mortgage under § 2053? Ex..

  Ventura corporation purchased machinery on january 1 2009

ventura corporation purchased machinery on january 1 2009 for 630000. the company used the sum-of-the-years-digits

  The payroll register of lowry landscaping co indicates

on september 1 klondike co. issued a 90-day note with a faceamount of 120.000 to arctic apparel co. for

  Decision makers vary widely in the types of decisions they

decision makers vary widely in the types of decisions they make the methods of decision making they employ the

  Tmothy is a 35 percent partner in the total partnership a

timothy is a 35 percent partner in the total partnership a calendar-year-end entity. timothy has an outside basis in

  A company has preferred stock that can be sold for 28 per

a company has preferred stock that can be sold for 28 per share. the preferred stock pays an annual dividend of 5 based

  During the entire period ending dec 31 of each year the

during the entire period ending dec 31 of each year the outstanding stock of the company was composed of 20000 shares

  Berne inc uses a flexible budget for manufacturing overhead

berne inc. uses a flexible budget for manufacturing overhead based on machine hours. variable manufacturing overhead

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd