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Your firm is contemplating the purchase of a new $633,000 computer-based order entry system. The system will be depreciated straight-line to zero over its six-year life. It will be worth $43,000 at the end of that time. You will be able to reduce working capital by $38,000 at the beginning of the project. Working capital will revert back to normal at the end of the project. Assume the tax rate is 35 percent.
Requirement 1: Suppose your required return on the project is 9 percent and your pretax cost savings are $193,000 per year. What is the NPV of the project? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) NPV $ Requirement
2: Suppose your required return on the project is 9 percent and your pretax cost savings are $133,000 per year. What is the NPV of the project? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places (e.g., 32.16).)
Debt is the term associated with the money you owe another party. Write down the difference between the expense and a debt?
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You are interested in investing in a five-year bond that pays a 6.18 percent coupon with interest to be received semiannually. Your required rate of return is 9.66 percent. What is the most you would be willing to pay for this bond?
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You are required to develop a personal development action plan. To develop the plan you need to assess your current situation
Your organization has been asked to invest in a continuing care retirement center. Your investment will be $600,000 per year for the next five years. After five years, cash flows will be $400,000 per year for the next 12 years.
What annual contributions to retirement fund will let you to receive the $60,000 annually? What annual contributions are needed if the contributions are made at the beginning of each year?
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