Amount should be used as initial cash flow for this project

Assignment Help Financial Management
Reference no: EM13879353

Alamosa Corp. purchased a lot in Arvada 3 years ago at a cost of $250,000. Today, that lot has a market value of $360,000. At the time of the purchase, the company spent $20,000 to level the lot and another $25,000 to install storm drains. The company now wants to build a new facility on that site to expand its business. The building cost is estimated at $1,600,000. What amount should be used as the initial cash flow for this project?

Reference no: EM13879353

Questions Cloud

How much does a share of preferred stock cost today : E-Eyes.com just issued some new preferred stock. The issue will pay an annual dividend of $29 in perpetuity, beginning 18 years from now. If the market requires a return of 4.3 percent on this investment, how much does a share of preferred stock cost..
What is current value of put option with exercise price : Suppose VS's stock price is currently $20. In the next six months it will either fall to $10 or rise to $30. What is the current value of a put option with an exercise price of $15? The six-month risk-free interest rate is 5% (periodic rate).
Calculate his monthly installment : Ross wants to buy a car worth 50 000 by financing it over a period of 36 months. The bank offers Ross an interest rate of 20% per annum, compounded monthly. They also offer him a 6 month grace period. Calculate his monthly installment.
If firm receives a cash flow from an investment : If firm receives a cash flow from an investment that will increase by 10 percent annually for an infinite number of years. This cash flow stream is called. A portfolio with a level of systematic risk the same as that of the market has a beta that is...
Amount should be used as initial cash flow for this project : Alamosa Corp. purchased a lot in Arvada 3 years ago at a cost of $250,000. Today, that lot has a market value of $360,000. At the time of the purchase, the company spent $20,000 to level the lot and another $25,000 to install storm drains. The compan..
Compute the yield to call : A 4.25 percent coupon municipal bond has 13 years left to maturity and has a price quote of 105.10. The bond can be called in eight years. The call premium is one year of coupon payments. (Assume interest payments are semiannual and a par value of $5..
Realized return is known as the holding period yield : The YTM on a bond is the interest rate you earn on your investment if interest rates don’t change. If you actually sell the bond before it matures, your realized return is known as the holding period yield (HPY).
What is the effective annual yield : Bourdon Software has 11.2 percent coupon bonds on the market with 20 years to maturity. The bonds make semiannual payments and currently sell for 108.4 percent of par. What is the current yield on the bonds? What is the effective annual yield?
What is the percentage price change of these bonds : Bond J has a coupon rate of 5 percent and Bond K has a coupon rate of 11 percent. Both bonds have 19 years to maturity, make semiannual payments, and have a YTM of 8 percent. If interest rates suddenly rise by 2 percent, what is the percentage price ..

Reviews

Write a Review

Financial Management Questions & Answers

  What rate is their interest payment now

A company has arranged to borrow $200 million at LIBOR plus 20 basis points. Microsoft has entered into an interest rate swap so that Microsoft receives LIBOR and pays 7% under the swap. With the swap, what rate is their interest payment now?

  Free of material misstatements

What assurance, if any, if there that the financial statements are in compliance with GAAP, and are free of material misstatements?

  What was the approximate real return

A stock had a return of 5.7 percent last year. If the inflation rate was 1.6 percent, what was the approximate real return?

  What was the annual effective rate

You borrowed $45 from a friend and after ten months repaid $50.. What monthly interest rate did you pay?  (xx.xx%) What nominal annual interest rate did you pay?  (xx.xx%) What was the annual effective rate?

  What annual return you will need to earn to meet this goal

You plan on retiring in 20 years. You currently have $275,000 and think you will need $1,000,000 to retire. Assuming you don’t deposit any additional money into the account, what annual return you will need to earn to meet this goal.

  About the sales increase

Maggie's Muffins, Inc., generated $2,000,000 in sales during 2013, and its year-end total assets were $1,300,000. Also, at year-end 2013, current liabilities were $1,000,000, consisting of $300,000 of notes payable, $500,000 of accounts payable, and ..

  Determine the growth rate of the company

Determine the growth rate of the company for each of next three years and Suppose after one year, everything else will be unchanged but the required rate on equity will decrease to 14%. What would be your holding period return for the year?

  How much would you pay for perpetuity which pays

How much would you pay for perpetuity which pays $500 (the first payment coming three years from today) every three years grows by 2% each payment? The discount rate is a 5% per year.

  Net income and operating cash flow

During the year, Belyk Paving Co. had sales of $2,387,000. Cost of goods sold, administrative and selling expenses, and depreciation expense were $1,438,000, $436,300, and $491,300, respectively. In addition, the company had an interest expense of $2..

  Security percent of portfolio beta

Security Percent of portfolio Beta. Calculate the beta portfolio

  What is the implied interest rate for the first six months

Suppose the spot price of gold is $1200 per ounce. The futures price for delivery in six months is $1208, while the futures price for delivery in one year is $1214. The interest rate on 6-month loans is 1.00percent (on an annual basis). What is the i..

  Calculate the equivalent annual operating cost of machine

The operating cost of a new machine is $500 for the first year. Starting the second year, the operating cost increases by $200 per year for the next 10 years. Calculate the equivalent annual operating cost of the machine. What will be the present and..

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