The breakeven cash inflow for the project

Assignment Help Financial Management
Reference no: EM131063619

Tangshan Mining Company, with a cost of capital of 10 percent, is considering investing in project A, with an initial investment of $1,000,000. Project A is expected to provide equal cash inflows over its 5 year useful life. Based on this information, the breakeven cash inflow for the project is $_______. (Please calculate the arithmetic solution and show your work)

Reference no: EM131063619

Questions Cloud

Performing the finance function : Briefly explain the three major decisions every Manager has to take while performing the finance function.
For capital budgeting evaluation of replacement projects : For capital budgeting evaluation of replacement projects, the computation of after-tax operating cash flows for each project (i.e., existing versus proposed) is compared to arrive at incremental cash flows. This calculation requires that both depreci..
What is the weighted average cost of capital for this firm : The current stock price for a company is $44 per share, and there are 8 million shares outstanding. The beta for this firms stock is 1.6, the risk-free rate is 4.8, and the expected market risk premium is 5.7%. what is the Weighted Average Cost of Ca..
Is there really no taxable income : Discuss some of the pros and cons of using debt as a long-term source of capital funding for a company. Why does using an appropriate amount of debt increase the value of the firm?
The breakeven cash inflow for the project : Tangshan Mining Company, with a cost of capital of 10 percent, is considering investing in project A, with an initial investment of $1,000,000. Project A is expected to provide equal cash inflows over its 5 year useful life. Based on this information..
Present decision to accept corporation as audit client : Tammy Potter, a new partner with the regional CPA firm of Tower & Tower, was recently appointed to the board of directors of a local civic organization. Present arguments supporting a decision to accept Tierra Corporation as an audit client
When preparing a statement of cash flows : When preparing a statement of cash flows on the indirect method, each of the following should be classified as an operating activity cash flow except : Answer Question 20 answers An increase in accounts receivable.
Differently to effect a more financially sound future : Provide an example scenario with rationale of an area in your personal life in which you would like to apply, or have already applied, time value of money concepts. What might you do differently to effect a more financially sound future
Economic roles of the government : Some economists argue that the government intervention makes the economic outcome even worse. Some argue that there are important economic roles of the government. What is your opinion? Does the government do good or bad? Briefly discuss.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the accounting break-even quantity

A project has the following estimated data: price = $64 per unit; variable costs = $42 per unit; fixed costs = $15,000; required return = 15 percent; initial investment = $28,000; life = four years. Ignoring the effect of taxes, what is the accountin..

  Which of the two bonds is cheaper to deliver

A 5-year bond with a 4.45% coupon sells for $107.48. A 7-year bond with a 5.75% coupon sells for 116.564. The conversion factor for the 5-year bond is 0.933891 while the 7-year bond is 0.98588. Assume that the yields for both bonds are 6% and that co..

  Considering investing in a four-year bond

Suppose that you are considering investing in a four-year bond that has a par value of $1,000 and a coupon rate of 6%. What is the price of the bond if the market interest rate on similar bonds is 6%? What is the bond’s current yield? Suppose that yo..

  Principal and the remaining accrued interest

Ron borrows $20,000 for 20 years at an annual rate of interest of 10% convertible semi-annually. He repays $500 in interest at the end of each six months. The principal and the remaining accrued interest are to be paid at the end of 20 years by equal..

  Those quotes and the fair values of the investment

Prepare the journal entries through June 30, 2011, to record the investment in notes, interest, and necessary adjustments for changes in fair value.

  The bonds make semiannual payments and have a par value

Sqeekers Co. issued 11-year bonds a year ago at a coupon rate of 7.7 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 6 percent, what is the current bond price?

  Abandon change the firms decision to accept the project

Hit or Miss Sports is introducing a new product this year. If its see-at-night soccer balls are a hit, the firm expects to be able to sell 60,000 units a year at a price of $50 each. The firm will make the decision to continue or abandon after the fi..

  Project will produce no cash flows for the first two years

EEG, Inc. is considering a new project that will require an initial cash investment of $388,000. The project will produce no cash flows for the first two years. The projected cash flows for years 3 through 7 are $69,000, $88,000, $125,000, $140,000, ..

  Separate from or part of pursuing low-cost country strategy

Mattel’s global sourcing in China, like all other toy manufacturers, was based on both low-cost labor, and a growing critical mass of factories competitively vying for contract manufacturing business. Do you think the product recalls and product qual..

  What is the companys cost of equity capital

David Ortiz Motors has a target capital structure of 40% debt and 60% equity. The yield to maturity on the company's outstanding bonds is 12%, and the company's tax rate is 40%. Ortiz's CFO has calculated the company's WACC as 9.58%. What is the comp..

  What is the current value of the annuity

A 6-year annuity of twelve $5,400 semi-annual payments will begin 11 years from now, with the first payment coming 11.5 years from now. If the discount rate is 7 percent compounded monthly, what is the value of this annuity five years from now? If th..

  Common stock value-zero growth-personal finance problem

Kelsey Drums, Inc., is a well-established supplier of fine percussion instruments to orchestras all over the United States. The company's class A common stock has paid a dividend of $5 per share per year for the last 15 years. Management expects to c..

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