Present value of the cash inflows of project

Assignment Help Finance Basics
Reference no: EM132000630

Southern California Publishing Company is trying to decide whether to revise its popular textbook, Financial Psychoanalysis Made Simple. The company has estimated that the revision will cost $95,000. Cash flows from increased sales will be $20,400 the first year. These cash flows will increase by 5 percent per year. The book will go out of print six years from now. Assume that the initial cost is paid now and revenues are received at the end of each year.

If the company requires a return of 12 percent for such an investment, calculate the present value of the cash inflows of the project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Reference no: EM132000630

Questions Cloud

How much will it cost you to buy a seat if the company uses : How much will it cost you to buy a seat if the company uses cumlative voting (assuming there are 4 seats in the current election)?
What is the new inflow or outflow as measure in us dollars : The expected exchange rate of the Australian dollar is $0.56. What is the new inflow or outflow as measure in U.S. dollars?
What is the firm roe : The firm generates $2.40 in sales per dollar of assets. What is the firm's ROE?
What is louies payback period for this investment : Having successfully sold the bookstore, Louie is now interested in other investment projects. He is considering investing in a lease on a set of timber.
Present value of the cash inflows of project : If the company requires a return of 12 percent for such an investment, calculate the present value of the cash inflows of the project.
Compute the cost of the ending inventory : Question - Cost of Ending Inventory. Compute the cost of the ending inventory under each of three methods: (a) average-cost, (b) LIFO, and (c) FIFO
Determine what is the cost of common equity : The stock is expected to pay a dividend of $3.00 per share at the end of the year and the dividend is expected to grow at a constant rate of 5% per year.
Make a story about positioning for success : Follow the example that attached and make a story that one for employee and one for manager - Story ONLY, no Theory and personal ideas
What is the target stock price in one year : Sully Corp. currently has an EPS of $2.35, and the benchmark P/E ratio for the company is 21.

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