Calculate the payback and discounted payback periods, Financial Accounting

Assume that the company has an investment opportunity. Building a new factory would cost $750 million but would reduce cash operating costs by $150 million per year for the next 10 years. The factory could be sold for $200 million at the end of the 10 years. The relevant discount rate for a project with this risk is 15%. Ignore depreciation and any taxes.

Calculate the payback and discounted payback periods (remember, since this is a limited time project, it is possible not to have payback, which would mean that the project never breaks even)

Calculate the IRR%

Calculate the NPV

Posted Date: 3/26/2013 2:42:29 AM | Location : United States

Related Discussions:- Calculate the payback and discounted payback periods, Assignment Help, Ask Question on Calculate the payback and discounted payback periods, Get Answer, Expert's Help, Calculate the payback and discounted payback periods Discussions

Write discussion on Calculate the payback and discounted payback periods
Your posts are moderated
Related Questions
McM Cog is a supplier of industrial parts.  Most orders are received at a call center. The call center currently has 10 phone lines total, i.e., a maximum of 10 callers may be in t

Appointment of Liquidator The liquidator is appointed by the court after the above meetings have been held: if the meetings do not agree, the court must settle the issue: if no a

Q. What do you mean by depreciation? What are the causes for depreciation? Explain the two methods of depreciation. Depreciation means a fall in the quality, quantity or value o

what is the reason of incorporating 1. corporate governance statement 2. audit committee statement 3. internal audit statement into annual reports?

Defunct Companies A company may be dissolved under s.338 without winding up if the registrar has reasonable cause to believe it is defunct: The procedure is: a. Registrar writ

Do we recognise revenue if it will be assigned to other party ?

t account for equipment beg, bal 80,000 disposal 22,000 acquisition-41,000 end bal. 99,600 acct. depreciation equip. disposa; 8,500 beg, bal 41,500

A village ordered supplies for its Fire Department at an estimated cost of $16,700. The supplies were received with an invoice for $16,800. The village accepted the shipment and th

You have previously been exposed to the 'Introduction and analysis' of financial statements in previous sections of this course. From now you might have acquired several familiarit

James Bell plans to stay at the Michaels Motel for one month, and he prepays his room charges. Bell arrives and begins his stay on January 21. To account for Bell's prepayment, at