What is the npv for project

Assignment Help Financial Management
Reference no: EM132037888

McGilla Golf has decided to sell a new line of golf clubs. The length of this project is seven years. The company has spent $113063 on research and development for the new clubs. The plant and equipment required will cost $2834758 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $131471 that will be returned at the end of the project. The OCF of the project will be $861926. The tax rate is 29 percent, and the cost of capital is 10 percent. What is the NPV for this project?

Reference no: EM132037888

Questions Cloud

How would the investor hedge call option position : How would the investor hedge the call option position? Assume that the option is written on 100 shares of stock.
Hat is the wacc and what is the firms ocf : What is the WACC? What is the firms's OCF? What is the NPV?
Experimental cost-saving procedure by issuing common stock : Shanos Inc. would like to finance an experimental cost-saving procedure by issuing new common stock.
Bonds with warrants if they are to clear the market : What coupon interest rate must the company set on the bonds with warrants if they are to clear the market.
What is the npv for project : McGilla Golf has decided to sell a new line of golf clubs. What is the NPV for this project?
What is the value of strangle at maturity : What is the value of the strangle at maturity as a function of the then stock price?
What is the corporations weighted average cost of capital : What is the corporations weighted average cost of capital?
What is the payback period for project : The tax rate is 28 percent, and the cost of capital is 8 percent. What is the payback period for this project?
What will the firm pe ratio : What will the firm’s PE ratio be if the firm repurchases 25,000 shares? Assume all else remains constant.

Reviews

Write a Review

Financial Management Questions & Answers

  Calculate the percent of total return

Assume that one year ago, you bought 200 shares of a mutual fund for $21 per share, you received an income distribution of $0.11 cents per share and a capital gain distribution of $0.32 cents per share during the past 12 months. Also assume the marke..

  Would you be willing to purchase the patron membership

If you believed 3% to be an appropriate, would you be willing to purchase the patron membership? Why or why not?

  Company is planning on increasing its annual dividend

The Onboard Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 24.8 percent a year for the next 3 years and then decreasing the growth rate to 3.2 percent per year. The company just paid its ..

  Calculated assuming a classical tax system

CoffeeCarts has a cost of equity of 15% (calculated assuming a classical tax system), an after-tax cost of debt of 4%,

  Determine the debt ratio of firm after dividend payment

Determine the debt ratio (D/E) of the firm after the dividend payment.

  Calculate the balance of the fund

Calculate the balance of the fund on July 1, 1999, immediately before the deposit is made

  Why does the wto permit regional trade agreements

Why does the WTO permit regional trade agreements when they violate the "most favored nation" principle?

  What was the percentage change in the price of the bond

A company issues a ten-year bond at par with a coupon rate of 6% paid semi-annually. The YTM at the beginning of the third year of the bond (8 years left to maturity) is 7.8%. What was the percentage change in the price of the bond over the past two ..

  Streams of payments

What is the accumulated sum of each of the following streams of payments?

  What coupon rate do you need to set

Your company currently has $1,000 par, 6.25 % coupon bonds with 10 years to maturity and a price of $1,066. what coupon rate do you need to set?

  Yield an annual depreciation for tax purposes

An intangible asset initially valued at $100,000 is expected to last for 10 years and have a salvage value of $10,000 at the end of its life. A straight-line depreciation method would yield an annual depreciation for tax purposes of [x].

  What is the new exchange rate for the yen

The inflation rate in the U.S. is 3%, while the inflation rate in Japan is 2%. The current exchange rate is $1 equal to 101 Japanese yen. If purchasing power parity condition is existed, what is the new exchange rate for the yen?

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