Equipment costs-what is the profit for the company

Assignment Help Financial Management
Reference no: EM13811245

ABC company is to sell a piece of equipment for 100,000$, the company will receive the payment five years from today. The equipment costs 70,000$ to produce. If the appropriate discount rate is 9.45%, what is the profit for the company?

Reference no: EM13811245

Questions Cloud

Merger bid : Harrison Corporation is interested in acquiring Van Buren Corporation. Assume that the risk-free rate of interest is 5% and the market risk premium is 7%. If Harrison were to acquire Van Buren, what would be the range of possible prices that it could..
About the valuation : Harrison Corporation is interested in acquiring Van Buren Corporation. Assume that the risk-free rate of interest is 3% and the market risk premium is 4%. Van Buren currently expects to pay a year-end dividend of $1.65 a share (D1 = $1.65). Van Buren..
The financial breakeven point for each plan : Amarillo Parts is considering purchasing a small firm in the same line of business. The purchase would be financed by either the sale of common stock or by a bond issue. The financial manager wants to evaluate how the two alternative financing plans ..
What is the price of the bond : Cisco has issued an 7%, 20-year bond with a par value of 1000$ that pays interest quarterly. If the yield to maturity 8.5%, what is the price of the bond?
Equipment costs-what is the profit for the company : ABC company is to sell a piece of equipment for 100,000$, the company will receive the payment five years from today. The equipment costs 70,000$ to produce. If the appropriate discount rate is 9.45%, what is the profit for the company?
Should you exercise or not exercise the call-explain : Suppose you paid $5 for a $20 call option (strike price = $20) months ago. This option expires today and the current stock price is $22. If you exercise the call, the call payoff is $2 (=$22 - $20) and the profit will $2 - $5 = -$3. Should you exerci..
Describe the scope of public finance : Describe the scope of Public Finance. Explain different philosophical approaches to the role of the government. Describe the size of the government sector in the U.S. List and explain the determinants of each demand curve and supply curve.
Outstanding callable bonds : Which of the following events would make it less likely that a company would choose to call its outstanding callable bonds?
Calculate the project’s annual project free cash flows : CALCULATING PROJECT FCF In the spring of 2015, Jemison Electric was consider-ing an investment in a new distribution center. calculate the project’s annual project free cash flows (FCFs) for each of the next five years where the salvage value of oper..

Reviews

Write a Review

Financial Management Questions & Answers

  Describe the role of the firms tax rate in cost of capital

How is the fun's weighted cost of capital influenced by the firm's capital structure and describe the role of the firm's tax rate in cost of capital calculations?

  Compute break-even point at the operating profit level

Compute Break-Even Point at the operating profit level: Ensco Lighting Company has fixed costs of $100,000, sells its units for $28 and has variable costs of $15.50 per unit. Compute the breakeven point.

  1 calculate the annualized forward premium or discount on

1. calculate the annualized forward premium or discount on six-month forward yen.2. if you are planning to go to japan

  Options pertaining to home mortgage financing

You are given the following options pertaining to home mortgage financing: A) Loan amount $200,00, fixed rate 3.5%, 30 year term, closing costs = $7,000. APR _______________ B) Loan amount $200,000, Fixed rate 3.25%, 30 year term, closing costs = $11..

  Value of a bond in relation to annual discounting

What effect does the use of semi-annual discounting have on the value of a bond in relation to annual discounting?

  Sausage system with an installed cost

Symon Meats is looking at a new sausage system with an installed cost of $490,000. This cost will be depreciated straight-line to zero over the project’s five-year life, at the end of which the sausage system can be scrapped for $72,000.

  What is the duration if the yield to maturity

Find the duration of a 6% coupon bond making annual coupon payments if it has three years until maturity and a yield to maturity of 6.2%. What is the duration if the yield to maturity is 10.2%?

  What is the present value of the annuities

What is the Present Value of the following annuities? How did you get to your answer?

  Characteristic of the price of stock

Which is a characteristic of the price of stock?

  Prepare a columnar condensed income statement

Prepare an incremental analysis concerning the possible discontinuance - Prepare a columnar condensed income statement for Panda Corporation, assuming Division IV is eliminated - quality of decision making is to an organisation

  What is the present value

An investment will pay you $43,000 in 10 years. If the appropriate discount rate is 7 percent compounded daily, what is the present value? (Use 365 days a year. Do not round intermediate calculations and round your final answer to 2 decimal places. (..

  Institutional investor speculates the rise of interest rate

An institutional investor speculates the rise of interest rate in twelve months time. It therefore enters today with a local bank a twelve-month forward rate agreement to borrow Eurodollar for six months at 1.96% at contract expiration, with a notion..

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