What is the net present value of project

Assignment Help Financial Management
Reference no: EM132014407

Middlefield Motors is evaluating a project that would cost 5,100 dollars today. The project is expected to have the following other cash flows: 2,700 dollars in 1 year, -2,030 dollars in 2 years, and 5,300 dollars in 4 years. The cost of capital of the project is 5.27 percent. What is the net present value of the project?

Reference no: EM132014407

Reviews

Write a Review

 

Financial Management Questions & Answers

  Instead of issuing new equity or borrowing from its bank

A business wants to expand production. Instead of issuing new equity or borrowing from its bank, it decides to use the cash on its balance sheet in order to purchase additional equipment. Which of the following are unchanged as a result of this actio..

  Discount rate should the firm apply to project cash flows

Titan Mining Corporation has 14 million shares of common stock outstanding, 900,000 shares of 9 percent preferred stock outstanding and 220,000 ten percent semiannual bonds outstanding, par value $1,000 each. What discount rate should the firm apply ..

  Determine the average level of inventory

EOQ reorder point, and safety stock. Alexis Company uses 877 units of a product per year on a continuous basis. The product has a fixed cost of $59 per order, and its carrying cost is $3 per unit per year. Determine the average level of inventory. (N..

  Manufactures biotech sunglasses-variable cost per unit

Night Shades Inc. (NSI) manufactures biotech sunglasses. The variable materials cost is $10.60 per unit, and the variable labor cost is $5.90 per unit. What is the variable cost per unit? Suppose NSI incurs fixed costs of $580,000 during a year in wh..

  Calculate the current return

Calculate the current return on American Water Works Co Inc AWK:US 71.59 USD and compare it to returns on bonds. Which is better to invest in presently a stock or a bond in this company and why?

  Resort to analyze its current financial situation

This change has caused Galapagos Islands Resort to analyze its current financial situation, beginning with reconciling its accounts.

  How is cost of capital related to capital budgeting

What is the cost of capital? How is cost of capital related to capital budgeting?

  Granting commerce companies industrial loan company charters

Which of the following is not a criticism against granting commerce companies industrial loan company charters?

  Taxes per year in order processing costs

Your firm is contemplating the purchase of a new $575,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $59,000 at the end of that time. You will save $265,000 before..

  The financing outstanding

The Saunders Investment Bank has the following financing outstanding. Debt: 140,000 bonds with a coupon rate of 10 percent and a current price quote of 114.

  According to the efficient market hypothesis

According to the efficient market hypothesis, prices of actively traded stocks ________. A) can be under- or over-valued in an efficient market B) can only be under-valued in an efficient market C) do not differ from their true values in an efficient..

  Compounding using a calculator

Bart Simpson, age 10, wants to be able to buy a really cool new car when he turns 16. how much does Bart have to save today in order to buy this car at age 16?

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