Depreciated over five years using the straight-line method

Assignment Help Operation Management

Reference no: EM13956370

Please show/explain work. Scott Investors, Inc, is considering the purchase of a 412,000 computer with an economic life of 5 years. The computer will be fully depreciated over five years using the straight-line method. The market value of the computer will be 76,000 in five years. The computer will replace 5 office employees whose combined income annual salaries are 121,000. The machine will also immediately lower the firm's required net working capital by 96,000. This amount of networking capital will need to be replaced once the machine is sold. The corporate tax is 34 percent. The appropriate discount rate is 15%. Calculate the NPV on this project. (please show .00 decimal places on all calculations)

Reference no: EM13956370

Questions Cloud

Risk-adjusted required return for each stock : Two stocks each pay a $1 dividend that is growing annually at 8 percent. Stock A's beta = 1.3; stock B's beta = 0.8. Which stock is more volatile? If Treasury bills yield 9 percent and you expect the market to rise by 13 percent, what is your risk-ad..

Slope of the security market line will decrease : A zero coupon bond is a bond that pays no interest and is offered (and initially sells) below par. These bonds provide compensation to investors in the form of capital appreciation. If investors become less averse to risk, the slope of the Security M..

Accrued payroll-including employee deductions : Prepare journal entries to record: (1) accrued payroll, including employee deductions, for July ; (2) cash payment of the net payroll (salaries payable) for July; (3) accrued employer payroll taxes, and other related employment expenses, for July- as..

How many selections are possible : A student did some holiday shopping by buying 4 books: 1 for his father, 1 for his mother, 1 for his young sister, and 1 for his older brother.

Depreciated over five years using the straight-line method : Please show/explain work. Scott Investors, Inc, is considering the purchase of a 412,000 computer with an economic life of 5 years. The computer will be fully depreciated over five years using the straight-line method. The market value of the compute..

Increasing number of workplaces appears : One of the new rules of survival in an increasing number of workplaces appears to be: If you don't have the personality to work round-the-clock, don't bother applying for a job here.

Expected return on an average investment in the market : You are considering the purchase of a common stock whose historical beta is .5. What rate of return should you require from this stock if the current risk free rate of return is 4% and the expected return on an average investment in the market is 11%..

The stock pays a annual dividend : Your broker recommends that you purchase Good Mills at $30. The stock pays a $3.20 annual dividend, which (like it’s per share earnings) is expected to grow annually at 8 percent. If you want to earn 15 percent on your funds, is this stock a good buy..

What must be the airplane acceleration : An airplane must have a velocity of 50 m/s in order to take off What must be the airplane acceleration if it is in to take off from a runway 50cm long?

User Account

All Pages