Annual interest rate-what is the net present value

Assignment Help Business Economics
Reference no: EM131083171

Your company is considering a new project -- buying a new truck to make some new deliveries.

-The deliveries will be worth $80,000 each year, for 8 years.

-The truck will cost $150,000. It will be kept for 8 years, at which time it can be sold for $30,000.

-A new driver will be paid $50,000 each year to operate the truck.

-The truck will need a one-time overhaul during its fourth year of operation, costing $25,000.

-Fuel and maintenance for the truck are expected to be $10,000 each year, for the 8 years.

*Using an annual interest rate of 7%, what is the Net Present Value (also called Net Present Worth) of this project?*

Reference no: EM131083171

Questions Cloud

Calculate the radiant heat loss if the surface : Calculate the radiant heat loss if the surface emissivity is 0.6. 1-23 A flat wall is exposed to an environmental temperature of 38?C.
Plant-level economies vs. firm-level economies of scale : Describe the difference(s) between the following terms/phrases. Subsidiaries/affiliates vs. Associates of a MNC. Plant-level economies of scale vs. firm-level economies of scale.
How two-stage free cash flow to the firm valuation method : Explain how the Two-Stage Free Cash Flow to the Firm valuation method can be used to calculate firm value. Provide an example.
Distinguish between voltammetry and amperometry : distinguish between voltammetry and amperometry
Annual interest rate-what is the net present value : Your company is considering a new project -- buying a new truck to make some new deliveries. The deliveries will be worth $80,000 each year, for 8 years. The truck will cost $150,000. It will be kept for 8 years, at which time it can be sold for $30,..
Discuss some of the key factors of the market domain : Discuss briefly how these factors affect the marketplace and impact your company (these key factors should represent a variety of factors and not just one source, such as technology or changes in supply of natural resources).
What is the amount of royalty income : Smith and Wesson have written a new managerial economics book for which they receive royalty payments of 15 percent of total revenue from sales of the book. Because their income is tied to revenue, not profit, they want to maximize total revenue. wha..
Differentiate the three types of cost accounting systems : Differentiate the 3 types of cost accounting systems (job order, process, and hybrid). Include detailed descriptions of each.
To prepare the new staff for the upcoming tax season : To prepare the new staff for the upcoming tax season, you have decided to hold 1-week training. Prepare a short Power Point presentation of 405 slides outlining the following:

Reviews

Write a Review

Business Economics Questions & Answers

  Considering selling several units of homogeneous product

A monopoly is considering selling several units of a homogeneous product as a single package. A typical consumer’s demand for the product is Qd = 60 - 0.25P, and the marginal cost of production is $80. Determine the optimal number of units to put in ..

  What a man needs to help provide a college education

What a man needs to help provide a college education for his young daughter. He can afford to invest $800/yr for the next four years, beginning on the girl's fourth birthday.

  Illustrate what would be the equivalent value today

A similar helicopter was purchased 4 years ago at a cost of 140,000$. At an interest rate of 7% per year. Illustrate what would be the equivalent value today of that 140,000$ expenditure.

  Any comments on skewness statistic and kurtosis statistic

Create summary statistics for hourly wage of women aged 35-39 years in Excel. (note:Data Analysis-Descriptive Statistics, choose summary statistics option.). Any comments on skewness statistic and kurtosis statistic?

  What will be its output under this form of taxation

A monopolist has an inverse demand curve given by p(y) = 12 - y and a cost curve given by c(y) = y2. What will be its profit maximizing level of output? Suppose the government decides to put a tax on this monopolist so that each unit it sells has to ..

  Ship alter production and consumption decisions of candice

Candice can make 5 units of food per day if she devotes all of her time to food production. She can make 10 units of clothing if she spends the whole day at clothing production. Now suppose a trading ship visits the island each day and offers to buy ..

  What is the equivalent uniform annual expense

Maintenance expenses for a bridge on the ohio river are stimated to be $20,000 per year for the first 8 years, followed by two separate $100,000 expenditures in years 12 and 18. the expected life of the bridge is 30 years. If i=6% per year, what is t..

  Explain how the mechanism described here works

The conventional wisdom has been that inflation is bad for the economy. If our inflation is running higher than our trading partners' inflation, according to this argument, our growth slows and jobs are lost. Explain how the mechanism described here ..

  What would happen in this market

What would happen in this market? If consumers’ expectations were such that they were concerned about the economy and jobs, what would you think would happen in this market?

  Economy is in recession and faces relatively high inflation

Suppose the U.S. economy is in a recession and faces relatively high inflation. List the twin problems which policymakers face. List the monetary policy approaches the Fed could take to resolve each problem (i.e, do not list the policy tools—just des..

  Structure consistent with assumptions of classical model

Consider a country with an economic structure consistent with the assumptions of the classical model. Suppose that businesses in this nation suddenly anticipate higher future profitability from investments they undertake today.

  Find the market equilibrium without any government control

The aluminum industry faces a private marginal cost curve PMC = 2Q and a market inverse-demand curve of PD = 60 – QD. However, production creates an externality with marginal damages of MD = Q. Graph the private marginal cost, the social marginal cos..

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