What is the net present value of the factory

Assignment Help Financial Management
Reference no: EM13881163

A factory costs $860,000. You reckon that it will produce an inflow after operating costs of $176,000 a year or 10 years. If the opportunity cost of capital is 12%, what is the net present value of the factory? What will the factory be worth after nine years?

Reference no: EM13881163

Questions Cloud

What is the present value of an annuity : What is the present value of an annuity due that pays 250 dollars per year for 4 years, if the appropriate discount rate is 5.0 percent per year, compounded annually?
What is the present value of an ordinary annuity : What is the present value of an ordinary annuity that pays $40 every 6 months, for 10 years, if the interest rate is 8.0 percent per year, compounded semi-annually?
What the relationship of the individual citizen : What  the relationship of the individual citizen to the federal government and to the state government under the proposed Constitution? How does the relationship come to terms with the idea that a republic must "guard one part of society against the ..
What is the main goal for accounting rules : What is the main goal for accounting rules in the United States and around the world? What characteristics must financial information possess to reach that goal?
What is the net present value of the factory : A factory costs $860,000. You reckon that it will produce an inflow after operating costs of $176,000 a year or 10 years. If the opportunity cost of capital is 12%, what is the net present value of the factory? What will the factory be worth after ni..
Compounding factors-discounting factors and financial risk : Most of us intuitively understand that a dollar required today does not have the same value as a dollar needed (or utilized) in the future. This is due to several factors including interest rates, compounding factors, discounting factors and financia..
A woman worked part-time as a clerk at a drugstore : A woman worked part-time as a clerk at a drugstore. She worked mostly on weekdays from 5 PM to 9 PM, but was occasionally given other shifts. Due to glaucoma, she eventually lost all her sight in her left eye. She had no difficulty performing her job..
Describe how a pos system could be useful to a company : Describe how a POS system could be useful to a company marketing managers. How could it be useful to production managers?
Volbeat corporation has bonds on the market : Volbeat Corporation has bonds on the market with 16 years to maturity, a YTM of 10.5 percent, and a current price of $943. The bonds make semi-annual payments. What must the coupon rate be on the bonds?

Reviews

Write a Review

 

Financial Management Questions & Answers

  Sales and projections indicate a return on invested capital

The SignPost has a WACC of 12%. They are contemplating growing their sales and projections indicate a return on invested capital (ROIC) of 9.5% as a result of the sales growth. The growth in sales: a) destroys value, b) adds value c) cannot be determ..

  Use time value of money

A town has to resurface a section of its roads. There are two options: gravel or going through another company that uses another surfacing technique. The gravel has an initial cost of $200,000 to put down and it costs $15,000 to grade the road on an ..

  What will the cost of the vehicle

What will the cost of the vehicle be at the end of three years and you want to save a equal amount at the end of each month for the next three years in order to pay cash for the new vehicle.

  What is the bonds value

A US Industries bond has an 8 percent coupon rate and a $1,000 face value. Interest is paid semi-annually, and the bond has 20 years to maturity. If investors require a 10 percent yield to maturity, what is the bond’s value?

  Invests problem

Beginning at age 27, Kimberly invests $2000 per year for ten years and then never sets aside another penny. Kaitlyn waits ten years and then invests $2000 per year for the next 30 years. Assuming they both earn 7 percent, how much will each twin have..

  Cardware’s top model-requested larry viveron

Candi Cardigan, CARDWARE’s top model, requested Larry Viveron, a well-known clothes designer and friend to give his opinion on a picture of a navy blue holiday show dress that she wanted to wear at the annual charity luncheon. Larry has designed seve..

  The current ratio measures liquidity

Which of the following statements about financial statement analysis is(are) most correct? The current ratio measures liquidity.

  Value chain analysis

Analyze or look at brand and critically assess them, an important analysis is the value chain.

  Source of capital market value

As a consultant to GBH Skiwear, you have been asked to compute the appropriate discount rate to use in the evaluation of the purchase of a new warehouse facility. You have determined the market value of the firm’s current capital structure (which the..

  What is the present value of this investment

An investment will pay $1283 two years from now, $ 3848 four years from now and $3124 five years from now. If the opportunity rate is 19.57 percent per year, what is the present value of this investment?

  Coin collection contains

Your coin collection contains 52 1952 silver dollars. If your grandparents purchased them for their face value when they were new, how much will your collection be worth when you retire in 2062, assuming they appreciate at an annual rate of 4.3 perce..

  What is the stocks value per share

Smith Technologies is expected to generate $175 million in free cash flow next year, and FCF is expected to grow at a constant rate of 6% per year indefinitely. Smith has no debt or preferred stock, and its WACC is 12%. If smith has 65 million shares..

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