Calculate the npv of project

Assignment Help Finance Basics
Reference no: EM132552552

Caradoc Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $425,000 is estimated to result in $165,000 in annual pre-tax cost savings. The press falls into Class 8 for CCA purposes (CCA rate of 20% per year), and it will have a salvage value at the end of the project of $56,500. The press also requires an initial investment in spare parts inventory of $35,000, along with an additional $4,600 in inventory for each succeeding year of the project. If the shop's tax rate is 35% and its discount rate is 9%.

Calculate the NPV of this project. (Do not round your intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.)

NPV $

Should the company buy and install the machine press?

-Yes
-No

Reference no: EM132552552

Questions Cloud

Describe the ideas to prevent an administrator : Software licensing is a major problem in cloud computing. In a 3 to 4 page paper come up with several ideas to prevent an administrator from hijacking.
Solve the total material variance for the material issued : Solve the Material Quantity variance.Total material variance for the 4,200 kg of material issued.Material Purchase price variance. Material Issue price variance
Explain some of the benefits of entering : Explain some of the benefits of entering into a referral partner negotiation on the basis of not having a set of preconditions, assumptions
Homeostasis functioning : The endocrine system is closely tied to homeostasis functioning. Why is the maintenance of homeostasis especially important during development of new humans
Calculate the npv of project : Caradoc Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press
Define how the cloud will impact future operating systems : Create a post where you discuss how the cloud will impact future operating systems. Initial posts should be a minimum of 400 words that cites sources.
Calculate and briefly comment on variances material purchase : Calculate and briefly comment on the variances Material Purchase price variance. Material Issue price variance. Material Quantity variance.
Define what is meant by interest rate risk : Define what is meant by interest rate risk. Assume you are the manager of a RM100 million portfolio of corporate bonds
Calculate the price of the bond if it is held to maturity : You have invested in a commercial bond issued by FHL, listed on SPX. The bond has a face value of $150,000 and pays coupons

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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