Calculate the npv for both conveyor belt systems

Assignment Help Corporate Finance
Reference no: EM131431451

Module Assignment

Your company has a cost of capital equal to 10%. If the following projects are mutually exclusive, and you only have the information that is provided, which should you accept?

 

A

B

C

E

Payback (years)

1

3

2

5

IRR

16%

18%

20%

15%

NPV (Millions)

$20

$55

$25

$80

a. A
b. B
c. C
d. B and C
e. E

2. Hagar Industrial Systems Company (HISC) is trying to decide between two different conveyor belt systems. System A costs $290,000, has a four-year life, and requires $85,000 in pretax annual operating costs. System B costs $405,000, has a six-year life, and requires $75,000 in pretax annual operating costs. Both systems are to be depreciated straight-line to zero over their lives and will have zero salvage value. Whichever system is chosen, it will not be replaced when it wears out. The tax rate is 34 percent and the discount rate is 11 percent.

Calculate the NPV for both conveyor belt systems.

Reference no: EM131431451

Questions Cloud

Evaluate the role of conceptual modeling : Database Systems and Administration - ECM38IS - Evaluate the role of conceptual modeling in the development of database systems and apply the entity-relationship modeling approach to a realistic scenario
Compare the level of capital spending across the two firms : Compare the level of capital spending across the two firms. Point out how the spending was similar and/or different and speculate why the similarities or differences might exist.
Create a layout for a post-event meeting : Create a layout for a post-event meeting highlighting which elements could be improved and which could be omitted from the next edition
What fraction of cans have less than 12.1 ounces : What fraction of cans have less than 12.1 ounces?- To what should you set the mean if you want at most 1 percent of your cans to contain at most 12 ounces?
Calculate the npv for both conveyor belt systems : Hagar Industrial Systems Company (HISC) is trying to decide between two different conveyor belt systems. Calculate the NPV for both conveyor belt systems.
How did the real plan work : How did the "Real Plan" work? Why was it successful? What led the central bank to introduce a crawling peg in March 1995?
Draw the characteristic lines of all of the companies : For each firm use regression analysis to calculate the firm's beta. (b) Draw the characteristic lines of all of the above companies. Calculate the beta of a portfolio consisting of 20% Gateway.
Discuss the process that robert should use : FINA 6001 Managing Finance Assignment. Discuss the process that Robert should use to determine which payment option he prefers. Ignore all taxes and assume that Jesse will live for at least 40 more years
What is meant by nonforfeiture clauses : What is meant by Nonforfeiture clauses? Why, mathematically, do some life insurance policies have nonforfeiture options (what feature of a policy allows for nonforfeiture options)? Provide three examples of nonforfeiture options.

Reviews

Write a Review

Corporate Finance Questions & Answers

  Questions based on return on equity

How much must the assets be reduced to bring the TATO to the industry average and questions based on Return on equity

  Do you agree with his analysis

If he buys the case, he receives a 10 percent discount and, by doing so, earns the 177 percent. Assume he buys the wine and consumes the first bottle today. Do you agree with his analysis? Do you see a problem with his numbers?

  Return and the standard deviation of portfolio returns

Based on the annual portfolio returns, calculate the expected (average) portfolio return and the standard deviation of portfolio returns.

  Develop specific objectives for proposed marketing programs

Develop specific (measurable) objectives for the proposed marketing programs (e.g., profit, sales, return on investment, market share, brand/ad awareness, attitude, etc.) for each year of operation.

  How much do you have to save each year during your working

How much money do you need today assuming that you will live on your last year of income in the first year of retirement and then draw down your nest egg at the start of the second year (equivalently, the end of the first year)?

  Evaluate the ear for each investment choice

You have found three investment choices for a one-year deposit: 10.5% APR compunded monthly,

  Calculate the cash dividend to be paid in 2008

Calculate the cash dividend to be paid in 2008 under each of the three proposals-Proposals for distributing of 2008 profits Maintain the dividend payout ration of 2007

  Discuss how the elements of a strategy map assist

Strategy maps are used in creating a balanced scorecard. Give one strategic measure and one objective measure for each dimension of a balanced score-card. Discuss how the elements of a strategy map assist in reaching a company's financial goals.

  Tapley inc currently has total capital equal to 5 million

tapley inc. currently has total capital equal to 5 million has zero debt is in the 40 federal-plus-state tax bracket

  Problem on prospect theory

Rex is a smart fellow. Rex gets an A in a course 80 percent of the time. Still, he likes his leisure, only studying for final exam in half of the courses he takes.

  What inherent risk factors should an auditor consider

What inherent risk factors should an auditor consider when auditing the revenue process of a computer manufacturer?

  Identify one or two variables that might influence behavior

List five behaviors that you could observe in your day-to-day life. For each one, identify one or two variables that might influence the behavior.

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