Proposed investment has an equipment cost

Assignment Help Financial Management

Reference no: EM131888640

A proposed investment has an equipment cost of $1380800. The cost will be depreciated straight line to a zero salvage value over its 15 year life. The firm will also use their existing, but currently unused, equipment that has been fully depreciated but has a market value of $37000. Cash sales will be $223690 per year and variable cost will run $98469 per year. Fixed cost is $56400 per year. The firm will also need to invest $45331 in net working capital. marketing research for this project was $46500 last year and on going marketing ads will cost $7000 per year. The appropriate discount rate is 7.4% and the corporate marginal tax rate is 33% while the average tax rate is 36%.

What is the NPV?

Reference no: EM131888640

Questions Cloud

Example of commodity money : True/False statements. Simply state if the statement is true or false. No explanation required.

Identify four learning centers that would be most beneficial : Identify four learning centers that you think would be most beneficial and developmentally appropriate for this age group.

Are the agreements enforceable : On Nov6,2017, Alexa agreed orally with Micheal (a) to lease a store to Micheal to Manhattann at $1000 per month for 6 months. Are the agreements enforceable?

Showing equilibrium in the market for loanable funds : a. Draw and label a graph showing equilibrium in the market for loanable funds.

Proposed investment has an equipment cost : A proposed investment has an equipment cost of $1380800. The cost will be depreciated straight line to a zero salvage value over its 15 year life.

Defects or failure in the market system : American Capitalism is not pure Capitalism; it has become a mixed economy, largely because of defects or failure in the market system that Adam Smith

What is the value of a share of BMI : Benchmark Metrics Inc.? (BMI), an? all-equity financed? firm, reported EPS of $5.77. What is the value of a share of BMI at the start of 2014? (end of? 2013)?

What are chances that the child would have disease : Assume that Tay-Sachs disease only affects homozygous recessive individuals. If two parents are carriers, what are chances that their child would have disease?

Discuss the factors you consider when making decision : Identify and briefly discuss the factors you consider when making your decision.

User Account

All Pages