Corporate finance, finance, Other Engineering

Firm A needs to purchase a new machine. If the machine is purchased, it will replace
an old machine purchased 10 years ago for €105,000 and which is being depreciated
on a straight line basis to a zero salvage value (15-year depreciable life). The old
machine can be sold for €60,000. The new machine will cost €200,000 installed and
will be depreciated using the following rate of 20, 32, 19, 12, and 11%; it will be sold
for €16,000 at the end of 5th year. The firm expects to be able to reduce net
working capital by €5,000 when the machine is installed, but required working capital
will return to the original level when the machine is sold after 5 years. Also, the firm
expects to increase its revenue by €20,000 per year if the new machine is
purchased, but cash expenses will also increase by €4,500 per year. If the firm’s cost
of capital is 10 percent and its tax rate is 20 percent what is the NPV of the project?
Posted Date: 2/14/2012 6:05:35 PM | Location : United States







Related Discussions:- Corporate finance, finance, Assignment Help, Ask Question on Corporate finance, finance, Get Answer, Expert's Help, Corporate finance, finance Discussions

Write discussion on Corporate finance, finance
Your posts are moderated
Related Questions
a web application using any technology that accepts an email address and checks if the domain of the email address exists.

Q. Describe the continuous production of metal strip by roll compacting of powder. Differentiate between impregnation and infiltration. Ans. Roll-compacting : It is the

Principal of Assembly buildings- fire protection engineering: As assembly buildings accommodate members of the public they often accommodate people with disabilities. People

Cathode ray tube (crt): Displays of this type, which are based on the electron beam scanning technique, have been used in aircraft for many years.  They were first used to disp

explain any two finishing processes in detail with neat diagram

an iron ring with amean dia of 50 cm has an air gap of 1mm awinding of 200 turns if the permeability of the iron is 400 when a circuit of 1.25A flows through the coil find the flux

Bravis lattice or Bravis crystal system: The ideas of space lattice was introduced by Bravis in 1990.According to this there are 14 possible types of space lattices in the seven ba

Atlas Inc. is planning to invest in a 4-year project which has the same risk as the firm’s existing assets and operations. The project requires a $150,000 initial investment and is

write an algorithm to find a number that multiplies your name 10 times

Evolutionary Methods Optimization methods based upon natural or biological processes Need to be able to parameterise a solution and determine a cost function (good or bad