What is payback period for this project

Assignment Help Financial Management
Reference no: EM132031773

McGilla Golf has decided to sell a new line of golf clubs. The length of this project is seven years. The company has spent $138363 on research and development for the new clubs. The plant and equipment required will cost $2843724 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $133145 that will be returned at the end of the project. The annual OCF of the project will be $863448. The tax rate is 33 percent, and the cost of capital is 12 percent. What is the payback period for this project? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Reference no: EM132031773

Questions Cloud

Determine the annual incremental free cash flow associated : Determine the annual incremental free cash flow associated with each expansion proposal relative to the status quo( no expansion)
Monthly payment necessary to amortize this debt : What is the amount of the MONTHLY payment necessary to Amortize this debt?
It expects to repay the debt at the end of four years : It expects to maintain this debt level into the far future? It expects to repay the debt at the end of 4 years?
What is total value of the project with the option to grow : What is the total value of the project with the option to grow? Identify and/or find all the inputs.
What is payback period for this project : The tax rate is 33 percent, and the cost of capital is 12 percent. What is the payback period for this project?
Sensitivity of npv to changes in quantity of new clubs sold : The tax rate is 29 percent, and the cost of capital is 7 percent. What is the sensitivity of the NPV to changes in the quantity of the new clubs sold?
The npv to changes in the price of the new clubs : McGilla Golf has decided to sell a new line of golf clubs. What is the sensitivity of the NPV to changes in the price of the new clubs?
Depreciated on straight-line basis : The plant and equipment required will cost $2891406 and will be depreciated on a straight-line basis.
Pricing under normal distribution : Pricing Under Normal Distribution. What is the z-score for PUT strike? What is the probability for PUT to expire in the money?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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