What is the net present value-npv of the project

Assignment Help Financial Econometrics
Reference no: EM13336434

Ford Motors expects a new hybrid-engine project to produce incremental cash flows of $100 million each year and expects these to grow at 4% each year. The upfron project costs are $900 million and ford's weighted average cost of capital is 9%. If the issuance costs for external fincances are $10 million what is the net present value (NPV) of the project?

Reference no: EM13336434

Questions Cloud

Who make buying decisions for organizations : Who make buying decisions for organizations
How to calculate the annual production of carbon dioxide : Calculate the annual production of carbon dioxide in kg if there are 40 million cars in the US and each car covers a diastase of 5000 miles at a consumption rate of 20 mpg.
Compute the customer margin for the anderson family : Company decides instead to use a traditional costing system in which ALL costs are allocated to customers on the basis of cleaninghours. Compute the margin for the Anderson family and calculated by multiplying the decline in jobs times the activity..
What is the bouyant force exerted on the balloon : A balloon inflated with helium (density .2 kg/m^3). If the density of air is 1.3 kg/m^3, what is the bouyant force exerted on the balloon
What is the net present value-npv of the project : The upfron project costs are $900 million and ford's weighted average cost of capital is 9%. If the issuance costs for external fincances are $10 million what is the net present value (NPV) of the project
Insuring each of the regions separately why is that : Suppose the insurance company can also cover the NE and SW Regions under a single insurance contract rather than two separate policies. The total premium under the combined policy is less than the total cost (sum of the two premiums) for insuri..
What is the intensity of light incident on the retina : A 2.0-mW laser pointer has a beam diameter of 1.7 mm. When it is accidentally pointed at a person's eye, What is the intensity of light incident on the retina
Evaluate the annual production of carbon dioxide : One gallon of gasoline in an automobiles engine produces on the average 9.50 kg of carbon dioxide. Calculate the annual production of carbon dioxide in kg if there are 40 million cars in the US and each car covers a diastase of 5000 miles at a con..
Case study - retired professor housecleaning : Compute the activity rates for all the activity cost pools and using the activity-based costing system, compute the customer margin for the Anderson family.

Reviews

Write a Review

Financial Econometrics Questions & Answers

  How much in local currencies do the supplies receive

An American business pays $10,000, $15,000, and $20,000 to suppliers in Japan, Switzerland, and Cananda, respectively. How much, in local currencies, do the supplies receive

  What is the initial cash flow and the terminal cash flow

Over the past year, Home Furnsihing Express has spent $17 studying the market for the new project. The accountants estimate that store overhead will increase due to the addition of the new back office personnel.

  What will be the companys dividend payout ratio in 2012

Prior to reporting this income statement, the company wants to determine its annual dividend. The company has 340,000 shares of stock outstanding, and its stock trades at $54 per share.

  Determine what will the price be in 3 years and in 15 years

Anton, Inc., just paid a dividend of $1.95 per share on its stock. The dividends are expected to grow at a constant rate of 4.1 percent per year, indefinitely. Assume investors require a return of 10.2 percent on this stock.

  Prepare a bank reconciliation statement using the form

The books of Steve's Services, Inc. disclosed a cash balance of $68,757 on June 30. The bank statement as of June 30 showed a balance of $54.780.

  How much money will invester invest in stock y

Your goal is to create a portfolio that has an expected return of 17 percent. Stock X has an expected return of 14.8 percent and a beta of 1.35, and Stock Y has an expected return of 11.2 percent and a beta of 0.90.

  Calculate the projects payback and mirr

The applicable depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%. Working capital would increase by $35,000 initially, but it would be recovered at the end of the project's 5-year life.

  Determine the size of the m1 money mulitplier

What would happen to the money supply if the reserve requirement increased to 14 percent while noncheckable deposits to checkable deposits fell to 35 percent. Assume the other ratios remain as orgiginally stated.

  How does the beta coefficient influence firms stock value

Olter, Inc. is starting its risk management program for the company and has asked for your help in determining critical risk measurements for the firm. The company has identified several factors in the market

  What is the projects expected npv assuming average risk

What is the project's expected (i.e., base case) NPV assuming average risk. (Hint: The base case net cash flows are the expected cash flows in each year.) how is the PVIFA calculated.

  What was the firms cash flow to creditors during 2010

The December 31, 2009, balance sheet of Schism, Inc., showed long-term debt of $1.395 million, and the December 31, 2010, balance sheet showed long-term debt of $1.57 million.

  Compute the cost of goods sold for the year ended december

the following data relate ti inventory for the year ended December 31, 2011. A physical inventory on December 31,2011, indicates that 600 units are on hand that they came from the July 1 purchase.

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