Requires an initial fixed asset investment

Assignment Help Financial Management

Reference no: EM13880940

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.82 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $2,120,000 in annual sales, with costs of $815,000. The tax rate is 30 percent and the required return on the project is 12 percent. What is the project’s NPV? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

NPV $

Reference no: EM13880940

Questions Cloud

Detail the provisions of the sarbanes-oxley act : Investigate in detail the provisions of the Sarbanes-Oxley Act of 2002 (SOX) from the Internet, periodicals, or academic journals. Select one of the provisions of the Act, briefly describe it, and indicate why you think (or do not think) financial s..

Install the equipment necessary to start production : Dahlia Enterprises needs someone to supply it with 120,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you’ve decided to bid on the contract. It will cost you $870,000 to install the equipment n..

Types of political crime : In a well-constructed one page essay (500+ words), discuss the different types of political crimes of treason, espionage, and terrorism, and how the US fights these political crimes

How much do we expect sales to grow over the next year : Which of the explanatory variables in the regression are statistically significant? Explain. How much of the total variation in pie sales does the regression model explain?

Requires an initial fixed asset investment : Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.82 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be w..

Write a program that performs a simple n-body simulation : Write a program that performs a simple n-body simulation, called "Jumping Leprechauns." This simulation involves n leprechauns, numbered 1 to n.

What is cost of existing-new preferred stock respectively : A firm's preferred stock is selling for $27.50 a share. The firm nets $25.60 after issuance costs. The stock pays an annual dividend of $3.00 per share. What is the cost of existing, and new, preferred stock respectively?

Explain desired skills and how they relate to the classroom : Explain the desired skills and how they relate to the classroom and home

Calculate the differences in cost and risk : Explain with examples how the cost of capital is determined. Calculate the differences in cost and risk. Explain why the costs and risks of external financing are important for the organization to understand. Explain why rapid growth plans are import..

User Account

All Pages