What is the net present value of this expansion project

Assignment Help Financial Management

Reference no: EM131595189

Simple Life Inc. is expanding and expects operating cash flows of $25,000 a year for 4 years as a result. This expansion requires $39,000 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project initially requires $3,000 of net working capital that will be recouped at the end of the project. What is the net present value of this expansion project at a required rate of return of 16 percent?

A. $18,477.29

B. $21,033.33

C. $23,704.29

D. $27,909.57

E. $32,409.57

Reference no: EM131595189

Questions Cloud

Prepare the appropriate accounting entries : National Electric Company sells a wide variety of consumer good products to various retailers. Please prepare the appropriate accounting entries

Probability that exactly two face cards were dealt : What is the probability that four rolls of the dice total exactly 19? What is the probability of totaling exactly 19 if we know that one die came up 1?

Explain how cole hardware use technology to manage inventory : Explain how Cole Hardware used technology to manage inventory and identify at least two benefits of the use of this technology by the company.

Calculate npvs to choose the project : Yonan Inc. is considering Projects S and L, whose cash flows are shown below.

What is the net present value of this expansion project : What is the net present value of this expansion project at a required rate of return of 16 percent?

Prepare the adjusting entry to record income tax expense : Hubler Company reported pretax accounting income of $45 million in 2017. Prepare the adjusting entry to record income tax expense, income tax payable

Why huxley statement more you know more you see is important : Huxley has been hailed as a genius. In a 1-2 page paper discuss why Huxley's statement "the more you know the more you see" is so important?

Expected return of a portfolio : Suppose Autodesk stock has a beta 2.10?, whereas Costco stock has a beta of 0.70. If the? risk-free interest rate is 6% and the expected return of the market.

Calculate the cost of purchasing the equipment with debt : Thomas Corporation is evaluating whether to lease or purchase equipment. Calculate the cost of purchasing the equipment with debt.

User Account

All Pages