What is the net present value of the new

Assignment Help Business Economics
Reference no: EM131487172

Modern Flooring is considering a new product line. The new line would require $134,000 of fixed assets and net working capital of $24,000. The firm will apply straight-line depreciation to a zero salvage value over three years. The new line is expected to produce an operating cash flow of $35,000 the first year with that amount decreasing by 10 percent annually for two years before the new line will be discontinued. The fixed assets can be sold for $25,000 at the end of the project and all net working capital will be recovered. What is the net present value of the new line at a discount rate of 11.5 percent and a tax rate of 35 percent?

(a) $31,209.17

(b) $15,311.09

(c) $36,054.48

(d) $16,513.84

(e) $17,456.32

Reference no: EM131487172

Questions Cloud

Maximum price you are willing to pay : What is the maximum price you are willing to pay for this stock today?
Experiencing a period of rapid growth : Danny Praise Computer Chips Ltd. is experiencing a period of rapid growth. Earnings and dividends are expected to grow at a rate of 15 percent during the next.
Explore types of principal-agency relationships : Does Sugar Transport's Human Resources department have any responsibility for their role in hiring Carcamo?
Identify subcategories of the theory and analyze each : Identify subcategories of the theory and Analyze each. Describing its meaning and core concepts as it relates to the nature of crime.
What is the net present value of the new : What is the net present value of the new line at a discount rate of 11.5 percent and a tax rate of 35 percent?
What is the total budget for this project : Provide the instructor with a resource plan for your project. (You may use the templates for Resource Plan provided)
Calculate the price differential for company : If the company has 3,500 shares outstanding and the risk-free rate of interest is 8%, calculate the price differential for this company.
Who gets treated and who has to wait : Determine what you plan to do and explain your reasoning as well as the ethical considerations behind your decision.
Create a sense of meaning and purpose for yourself : Identify how your personal model of leadership helps you create a sense of meaning and purpose for yourself, others, organizations, and society.

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

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