What is the projects net present value

Assignment Help Financial Management
Reference no: EM131328447

Corner Restaurant is considering a project with an initial cost of $211,600. The project will not produce any cash flows for the first three years. Starting in Year 4, the project will produce cash inflows of $151,000 a year for three years. This project is risky, so the firm has assigned it a discount rate of 18.6 percent. What is the project's net present value?

Reference no: EM131328447

Questions Cloud

Write a comment about the cultural awareness : It is very important that we as nurses have cultural awareness. I agree with you that we need to understand our patient's beliefs and values and we must not push our own beliefs and values to influence the patient.
Write a comment about the americas immigrant population : America's immigrant population makes up 12.5 percent of the total population, lending itself to a multi-ethnic, multi-cultural society (Edelman, Kudzma, & Mandle, 2014). Living, working, teaching, nursing in a country rich in diversity requires pe..
Write a commemta about cultural beliefs and customs : We often jump to conclusions based on our own cultural beliefs and customs. It is critical that we not only be culturally competent to the patients culture but do not push our own onto them in our assessments of the situations . I had a case wher..
Reinvestment approach to modified internal rate of return : The reinvestment approach to the modified internal rate of return:
What is the projects net present value : Corner Restaurant is considering a project with an initial cost of $211,600. The project will not produce any cash flows for the first three years. Starting in Year 4, the project will produce cash inflows of $151,000 a year for three years. This pro..
Will specific tax policy be sufficient to balance a budget : Will the specific tax policy be sufficient to balance a current year budget? Will the specific tax policy be sufficient to reduce our National Debt?
Write a comment about the given post : The overly processed food supply in grocery stores today is laden with added sugars and contains very little nutrient per calorie, leaving many people malnourished, even though they may eat a lot. A calorie is not just a calorie. Foods must cont..
What are svis pretax costs of debt : What are SVI's pretax costs of debt, preferred stock, and common stock?- Calculate SVI's weighted average cost of capital (WACC) on both a pretax and an after-tax basis.
What is the required return on sony preferred stock : A1-A17: Required return for a preferred stock- Sony $4.50 preferred is selling for $65.50. The preferred dividend is non-growing. What is the required return on Sony preferred stock?

Reviews

Write a Review

Financial Management Questions & Answers

  Determine profit loss per contract ignoring transaction cost

When this position was closed out, the quoted price was 93.20.  - Determine the profit or loss per contract, ignoring transaction costs.

  Ratio variable should be transformed into dichotomous

What condition suggest that a ratio variable should be transformed (recorded) into a dichotomous (two group) variable? A data processing analyst for a research supplier finds that preliminary computer runs of survey result show that consumers love a ..

  Maturity risk premium on both treasury and corporate bonds

Inflation is expected to increase steadily over the next 10 years, there is a negative maturity risk premium on both Treasury and corporate bonds, and the real risk-free rate of interest is expected to remain constant. Which of the following statemen..

  Calculate the forward rate of interest

Suppose you are given the following prices for two U.S. Treasury strips. Maturity date, Price, Yield to maturity: December 2014 41:25 6.83%, December 2015 38:27 6.87%. Assume for simplicity that the maturity dates are exactly 13 and 14 years from now..

  What is the expected return and risk-free rate return

The beta of M Simon Inc., stock is 1.7, whereas the risk-free rate return is 0.06. If the expected return on the market is 0.12, then what is the expected return on M Simon Inc? The risk-free rate of return is currently 0.02, whereas the market risk ..

  Assuming that the utilization reduction also occurs

Assume that Valley Forge Hospital has only the following three payer groups: Assuming that the utilization reduction also occurs, what overall net income would be produced if the variable cost per admission for the capitated group were lowered to $2,..

  Investors expect the market rate of return

Investors expect the market rate of return this year to be 14%. A stock with a beta of 1.5 has an expected rate of return of 20%. If the market return this year turns out to be 11%, what is the rate of return on the stock?

  Calculate the present value of the project to the firm

A firm has the opportunity to invest in a project that is expected to pay an end-of-year annual return of $2 million for each of the next fifteen years after taxes and expenses. The current cost of the project would be $6 million. Assuming a discount..

  What will be the value of the investment in two years

Your brother has asked you to help him with choosing an investment. He has $7,400 to invest today for a period of two years. You identify a bank CD that pays an interest rate of 0.0500 annually with the interest being paid quarterly. What will be the..

  Health care system has forecast net patient revenue

A health care system has forecast net patient revenue int he first 3 month of the year as follows. January $60 million, February $80 million, March $100 million. 60% of services are usually paid for in the month that they place and 40% in the followi..

  Not-for-profit acute care facility

General Hospital, a not-for-profit acute care facility, has the following cost structure for its inpatient services:

  The beta coefficient for stock

The beta coefficient for Stock C is bc = 0.4, while that for Stock D is bD = -0.5. (Stock D's beta is negative, indicating that its rate of return rises whenever returns on most other stocks fall. There are very few negative beta stocks, although gol..

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!

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