Calculate the equivalent annual cost of the project

Assignment Help Financial Management
Reference no: EM131575482

A 4-year project has an initial investment in fixed assets equal to $306,600, and initial net working capital investment of $29,200, and an annual operating cash flow of $46,720. The fixed asset is fully depreciated over the life of the project and has no salvage value. The net working capital will be recovered when the project ends. Assuming a required rate of return of 15%, calculate the equivalent annual cost of the project. (Enter a negative value, and round to a whole number)

Reference no: EM131575482

Questions Cloud

Find the terminal stock price using benchmark pe ratio : find the “terminal” stock price using a benchmark PE ratio.
What is the default risk premium on corporate bond : What is the default risk premium on the corporate bond?
What is the maturity risk premium for security : What is the maturity risk premium for the 2-year security?
What was? jeffs annualized hpr on this? investment : What was? Jeff's annualized HPR on this? investment
Calculate the equivalent annual cost of the project : A 4-year project has an initial investment in fixed assets equal to $306,600, calculate the equivalent annual cost of the project.
Calculate equivalent annual cost : Assuming a required rate of return of 13%, calculate the equivalent annual cost.
Calculate the after tax salvage value for the equipment : Calculate the after tax salvage value for the equipment.
Purchased newly built home that had no lawn or landscaping : Roger and Emma were married and purchased a newly built home that had no lawn or any other landscaping.
Use which two terms interchangeably : We use which two terms interchangeably?

Reviews

Write a Review

Financial Management Questions & Answers

  Find the maximum triangular arbitrage profit

Find the maximum triangular arbitrage profit (in terms of dollars) to someone with access to 10 million dollars at a 3% interest rate.

  Calculate the expected dividend yield

You buy a share of The Ludwig Corporation stock for $18.75. You expect it to pay dividends of $1.70, $1.802, and $1.9101 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $26.22 at the end of 3 years. Calculate the expected ..

  Tax court''s holding will reduce the total tax she pays

Emma, the sole shareholder of Quail Corporation (a C corporation), has the corporation pay her a salary of $300,000 in 2008. The Tax Court has held that $80,000 represents unreasonable compensation. Assuming Emma is in the 35% bracket in 2011, the Ta..

  What is current market price of the bonds

What is the current market price (intrinsic value) of the bonds?

  Assume the heights are normally distributed

According to the U.S. National Center for Health Statistics, the mean height of 18 -24 year old American males is 69.7 inches.

  What is the percentage price change of bond

Bond J is a 4 percent coupon bond. Bond K is a 11 percent coupon bond. Both bonds have 7 years to maturity, make semiannual payments, and have a YTM of 9 percent. If interest rates suddenly rise by 5 percent, what is the percentage price change of Bo..

  What is the portfolios expected return

A portfolio is invested 20 percent in Stock G, 55 percent in Stock J, and 25 percent in Stock K. The expected returns on these stocks are 8 percent, 18 percent, and 27 percent, respectively. What is the portfolio's expected return?

  Calculate the best case and worst case npv figures

Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within ±10 percent. Calculate the best-case and worst-case NPV figures.

  Calculate eps for 2004 and 2005

The shareholders will enjoy the same benefits during liquidation of the company.- Calculate EPS for 2004 and 2005.- Determine dividend per share for 2004 and 2005. Show your calculations.

  Different methods to price a european put option

John is trying three different methods to price a European put option that will expire in three months. The underlying stock is currently priced at $32 and doesn’t pay any dividend. The put strike is $30, the risk-free rate is 10% per annum and the v..

  Zero growth firm with an expected EBIT

The Wallace Corporation is a zero growth firm with an expected EBIT of $800,000 on a permanent basis, and corporate tax rate of 40 percent. Wallace uses no debt, and the cost of equity to an unlevered firm in the same risk class is 12.0 percent. The ..

  Bond issue outstanding with an annual coupon

Potter Industries has a bond issue outstanding with an annual coupon of 6% and a 10-year maturity. The par value of the bond is $1,000. If the going annual interest rate is 8.8%, what is the value of the bond?

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