What is the npv of the project using the apv methodology

Assignment Help Electrical Engineering
Reference no: EM132524071

The 5-year project requires equipment that costs $100,000. If undertaken, the shareholders will contribute $25,000 cash and borrow $75,000 with an interest-only loan with a maturity of 5 years and annual interest payments. The interest rate for debt is 10%. The equipment will be depreciated straight-line to zero over the 5-year life of the project. There will be a pre-tax salvage value of $5,000. There are no other start-up costs at year 0. During years 1 through 5, the firm will sell 25,000 units of product at $5; variable costs are $3; there are no fixed costs. The tax rate for the firm is 34%. The shareholders unlevered required rate of return is (Ku) is 15%.

What is the NPV of the project using the APV methodology?

Reference no: EM132524071

Questions Cloud

Compute the effective annual rate of interest : Opal Mining sold coal to Petric Electric, receiving a six-month, noninterest-bearing note for $200,000. Compute the effective annual rate of interest
Determine the unit product cost of each of the company : Texas Manufacturing Corporation has a traditional, Determine the unit product cost of each of the company's two products under the traditional costing system.
What was the loan term : Mary borrowed $7250 at an annual simple interest rate of 15.50 percent. She repaid the loan by paying a lump sum of $7394.70. What was the loan term?
Record write off Leer Company account for March : Prepare journal entries to record the above selected transactions of Dexter. Record write off Leer Company account for March 11
What is the npv of the project using the apv methodology : The 5-year project requires equipment that costs $100,000. If undertaken, the shareholders will contribute $25,000 cash and borrow $75,000 with an interest
Calculate controlling interest in consolidated net income : During 2019, Pearce reported net income from independent operations (including sales to affiliates) of $1,500,000, Calculate controlling interest
Create monthly cash collection budget for raptors rugs : Create monthly cash collection budget for Raptors Rugs from May through October Determine what would be the accounts receivable at the end of October
What is by-of-islands cost of capital : What is By-of-Islands' cost of capital based these experts' opinion of the market risk premium.?
Which of the settings associated with the booking : All fees and costs associated with the booking of a hotel room reservation for a consumer need to be disclosed in which of the following settings/instances?

Reviews

Write a Review

Electrical Engineering Questions & Answers

  Lithium ion battery technology

The paper includes Lithium ion battery technology with its advantages and disadvantages. The paper discusses about the Lithium air battery in which detailed reactions of Lithium with air including nonaqueous as well as aqueous are given.

  Power transformers and tariffs

Construction of different types of power transformer, significant energy savings

  Paper on orthogonal frequency-division multiplexing

This document is shown a paper on Orthogonal frequency-division multiplexing with advantages, disadvantages and uses.

  Function of the hmi in a scada system

This assignment contains electronics engineering questions like State the commonly found components of a SCADA (Supervisory control and data acquisition) system. and decribe the function of the HMI in a SCADA system.

  Resultant waveform of the odd harmonic series

Prepare an Excel graph showing the individual components and summated resultant waveform of the odd harmonic series resulting in an approximate square wave.

  Explain scada system

Explain the function of the HMI in a SCADA system.

  Design a 2-digit 24 second shot-clock

Design a 2-digit 24 second "shot-clock" countdown timer with pushbutton controller.

  Model a discrete-time system

To understand di erent signal models To be able to model a discrete-time system and design simple signal processing algorithms.

  Draw a relay construction diagram

Draw a relay construction diagram and briefly explain the operation of a relay.

  Frequency division multiplexing

Write a short technical report on Frequency Division Multiplexing

  Impact of electron energy

Briefly discuss the impact of electron energy, electron current and target on the Bremsstrahlung generated.

  Traffic light controller

The schematic of the traffic light controller

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