What is the total cash flow of the project for year three

Assignment Help Accounting Basics
Reference no: EM13902568

The Volunteer Company (VC) produces electrical switching components and isconsidering manufacturing a new component that will require new equipment.The production of this component will require $1,500,000 in net working capital tostart and additional net working capital investments each year equal to 15percent of the projected sales increases for the following year. Total fixed costsare $1,350,000 per year, variable production costs are $225 per unit and theunits are priced at $345 each. The equipment needed to begin production has aninstalled cost of $23,000,000. The equipment is considered to qualify as sevenyearMACRS property. In five years, the equipment can be sold for 20 percent ofits acquisition cost. VC is in the 35 percent marginal tax bracket and has arequired return on all its projects of 18 percent. Based on the precedingproject estimates, answer the following questions:Questions

A. What is the total cash flow of the project for Year 3?

B. What is the NPV of the project?

C. What is the IRR of the project?

D. Should VC begin this project? Explain

Reference no: EM13902568

Previous Q& A

  Different level of data available under the campaign tab

Adword tools. Name and describe the function of at least 3 different tools available to advertisers when running an Adwords campaign? What does CTR stand for and why is it so important in the bedding process? How are paid results determined by Google..

  What are a business''s responsibilities to its employees?

What are a business's responsibilities to its employees?

  What is the marginal product of capital

The marginal product of labor in the production of computer chips is 50 chips per hour. The marginal rate of technical substitution of hours of labor for hours of machine capital is 1/4. What is the marginal product of capital?

  Competitive advantage is built almost entirely

Consider a firm whose competitive advantage is built almost entirely on its ability to achieve economies of scale in producing small electric motors that are used by the firm to make hair dryers, fans, vacuum cleaners, and food processors.

  Appointment as the auditor to the firm

Matters to consider within the company, and other procedures that must be undertaken before accepting the appointment as the auditor to the firm.

  All cultures are relevant for decision maker or analyst

While every firm has a culture, not all cultures are relevant for a decision maker or analyst. Under what conditions is it important to pay attention to culture? When is it less important to analyze the influence of culture?

  History of technology used in finding a partner

Summarizes the history of technology used in finding a partner as shown in your timeline. Predicts the way technology will be used in the future for finding marriage and life partners

  Describe the production function for campaign votes

A political campaign manager must decide whether to emphasize television advertisements or letters to potential voters in a reelection campaign. Describe the production function for campaign votes. How might information about this function (such a..

  About identifying powerful people within your organization

How would you go about identifying the powerful people within your organization? What indicators would you look for? From what types of problems would these indicators suffer?

  How is power different from basic competence-efficiency

Power often accrues to individuals who are very effective in their jobs or to firms that enjoy sustained high performance. If this is so, how is power different from basic competence, efficiency, or performance?

Reviews

Write a Review

 

Similar Q& A

  Materials taken from the repair parts inventory

1.On September 11, 2012, Home Store sells a mower for $500 with a one  year warranty that covers parts.

  Suppose the price of apple stock goes up by 25 cisco rises

you own three stocks 600 shares of apple computer 10000 shares of cisco systems and 5000 shares of colgate-palmolive.

  Compute the amounts of interest paid

The Staggs Company has prepared its 2010 statement of cash flows. In conjunction with this statement, it plans to disclose the interest and income taxes it paid during 2010. The following information is available from its 2010 income statement and be..

  The brandilyn toy company manufactures a line of dolls and

the brandilyn toy company manufactures a line of dolls and a doll dress sewing kit. demand for the dolls is increasing

  Determining materials price variance

Robinson Enterprises purchased 56,000 pounds (cost = $420,000) of direct material to be used in the manufacture of the company's sole product. According the production specifications, each completed unit requires five pounds of direct material at ..

  Education in china is highly protected by the government

Education in China is highly protected by the government of the People's Republic of China

  At the end of the question and answer portion of the annual

at the end of the question and answer portion of the annual stockholders meeting of kemper corporation stockholder mike

  What should trump report on its 2012 income statement

The fair market value of the two securities were $15,000 (AFS) and $10,000 (trading), respectively. What should Trump report on its 2012 income statement as a result of the increase in fair value of the investments

  Youre starting a retirement savings program and expect to

youre starting a retirement savings program and expect to need 2500000 in 41 years. you begin with a deposit of 500 and

  American-based companies are required to adhere to us gaap

american-based companies are required to adhere to u.s. gaap generally accepted accounting principles however as

  Amy and lester are partners in operating a store

1.Amy and Lester are partners in operating a store. Without consulting Amy, Lester enters into a contract to purchase merchandise for the store.

  Accounts receivable arising from sales to customers

accounts receivable arising from sales to customers amounted to 80000 and 70000 at the beginning and end of the year

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