Net present value and irr of the project

Assignment Help Financial Accounting
Reference no: EM132203770

Cat Pharmaceutical is considering a project that requires a new piece of lab equipment that they purchase today for $80,000. It will depreciate on a straight-line basis over 10 years, after which it has a salvage value of $25,000. The new project is expected to produce $50,000 in yearly revenue and $7,500 per year of labor and maintenance, and $10,000 in yearly fixed costs. Revenues and expenses are increased by 3% inflation eachyear. The cost of capital for this type of equipment is 21%. Need is the net present value and IRR of the project.

Reference no: EM132203770

Questions Cloud

What stock price will you receive the margin call : The broker requires a 49% margin and says the margin call will happen at 40%. At what stock price will you receive the margin call?
You are considering starting a clinic : You are considering starting a clinic. Your financial projections for the first year of operations are as follows:
Evaluating two investment projects : Care Cat, Inc., is evaluating two investment projects, each of which requires and up-front expenditure of $1.5 million.
What are the reasons for housing affordability : ECON20039- Economics for Managers - discuss housing affordability crisis in Australia with the demand and supply side factors
Net present value and irr of the project : The cost of capital for this type of equipment is 21%. Need is the net present value and IRR of the project.
Significant marketing campaign from your internship brand : Identify a significant marketing campaign from your internship brand.
Explain the differences between fixed costs : Explain the differences between fixed costs, semi-fixed costs, and variable costs.
Hours of housekeeping services : The patient services departments generated $5 million in total revenues during 2004, and to support these clinical activities, used 5,000 hours of housekeeping
What are the total operating cash flows : Question: What are the total operating cash flows, given the following operating cash flows

Reviews

Write a Review

Financial Accounting Questions & Answers

  What is the effect on earnings in the year after the shares

FX Services granted 17.5 million of its $1 par common shares to Executive subject to forfeiture of employment is terminated within 4 years the common shares have a market price of $7 per share on the grant they ignoring taxes what is the effect on ea..

  Events is an asset exchange transaction

Which of the following events is an asset exchange transaction?

  Using us gaap and ifrs

In 2013, Slim Drug Company began to notice problems with its obesity drug. The company stopped selling the drug near the end of 2013. In the last six months of 2014, the company was sued by 1,000 people who had an allergic reaction to the company’s o..

  How the new position categories would need to be adjusted

An operating lease was entered into during the year. Identify how the new position categories would need to be adjusted for each of the transactions.

  Calculate profit - loss and balance sheet

The following is the summary of the cash box of sesay for the year ended 31/12/15 - Providing profit/loss and Balance sheet for the year ended 31/12/15

  Design a program in jgrasp using java code

Design a program in jGRASP using Java code to process students' scores and determine the final course grade  for each student in an ELAC class. Name this class YourEtudesUserIdD_PreTest5.java. The final course  grade is based on the total maximum ..

  Determine capitalized cost of facilities improvement project

University needs your help in doing some economic analysis for a facilities improvement project. The initial construction cost is $10,000,000. Routine maintenance cost is expected to be $200,000 per year. Determine the capitalized cost of this facili..

  Compute all of the materials and labor variances

Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials—1 pound plastic at $6 per pound $ 6.00 Direct labor—2.50 hours at $12.05 per hour 30.13 Variable manufacturing overhead 18.75 Fixe..

  Amount of uncollectible accounts expense

the amount of uncollectible accounts expense recognized in Tutor's income statement for March

  Popinski are two of the largest and most successful beverage

Super-Cola and Popinski are two of the largest and most successful beverage companies in the world in terms of the products that they sell and their receivables management practices

  Master budgeted income statement using variable costing

Master Budgeted income statement using Variable Costing and Overhead is applied on the basis of machine hours. The planned level of activity(denominator level) is 320,000 machine hours. The total budgeted fixed overhead is $800,000.

  Greatest expense is cost of goods sold

A Merchandiser’s greatest expense is cost of goods sold. Cost of goods sold is calculated based on the different inventory costing method that is used by the company: FIFO, LIFO, Specific identification method, or weighted average cost method.

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