Solution-What is the npv of the project

What is the npv of the project

Reference no: EM131428926

Replacement Analysis

St. Johns River Shipyards's welding machine is 15 years old, fully depreciated, obsolete, and has no salvage value. However, even though it is obsolete, it is perfectly functional as originally designed and can be used for quite a while longer. The new welder will cost $80,500, and have an estimated life of 8 years with no salvage value. The new welder will be much more efficient, however, and this enhanced efficiency will increase earnings before depreciation from $28,000 to $56,000 per year. The new machine will be depreciated over its 5-year MACRS recovery period, so the applicable depreciation rates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. The applicable corporate tax rate is 40%, and the firm's WACC is 14%. Should the old welder be replaced by the new one?

What is the NPV of the project? Round your answer to the nearest cent.

Reference no: EM131428926

Questions Cloud

Compute the annualized irr for this loan assuming : Suppose the index rate will remain 1% for the life of the loan. Compute the annualized IRR for this loan assuming Tim will prepay in 5 year

Why is project management so important in any field : Why is project management so important in any field? How can project management be applied to implement supply chain strategies? Why is project management so important in any field? How can project management bExplain how you would work with your sta..

Research paper about theater and the technology : THA 2140 - Intro To Theatre Mid-Term Research Paper - write a 4 to 5 page paper telling me the facts about your topic. This paper should be written using only the facts on the topic. THIS IS NOT AN OPINION PAPER. Make sure your paper is well writte..

Expected return and standard deviation : Stock A has an expected return of 12% and a standard deviation of 40%. Stock B has an expected return of 18% and a standard deviation of 60%. The correlation coefficient between Stock A and B is 0.2. What are the expected return and standard devia..

What is the npv of the project : The applicable corporate tax rate is 40%, and the firm's WACC is 14%. Should the old welder be replaced by the new one? What is the NPV of the project? Round your answer to the nearest cent.

What did you expect to find in your assigned agency : How did you go about preparing for this research? How did you contact the agency? What was the result? What roadblocks did you run into? What was the attitude of the people you talked to? Who did you talk to? What did you learn from the agency? Ho..

Problem regarding the governmental budgeting : By successfully completing this assignment, you will demonstrate your proficiency in the following course competencies and assignment criteria:

Find the standards given center line and control limits : Suppose process standards μ = 6.0 and σ = 1.5 are provided. Find the standards given center line and control limits for an x chart. If these limits had been applied to the values in the table as they were collected, would there have been out-of-co..

Did you have probable cause to approach the defendant : While working an undercover detail in a neighborhood known for drug activity, you notice a vehicle stopped at the intersection waiting for the light to change. The man in the vehicle makes eye contact with you. You approach his vehicle and begin c..

User Account

All Pages

What is the npv of the project

Reference no: EM131428926

Reference no: EM131428926

Questions Cloud

Reviews

Write a Review

Finance Basics Questions & Answers

Asuming that oglesby industries is recapitalized

How is deanna taxed on this distribution

What are the effects of leverage on shareholder wealth

What is fred doing wrong from a coaching standpoint

Problem related to the securities and exchange commission

Describe the primary services a bank provides to a firm how

Sample mean of students scores

What is the projected net present value of the new project

Evaluate the risk of entering into a joint venture

What about depreciation

Determining the short-term obligations

Cash outflows related to investing and financing activities

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT