What is the project profitability index

Assignment Help Finance Basics
Reference no: EM132668154

1. A firm is evaluating a project that yields the following after-tax net cash flows: $7,000 a year for 8 years and -$3,000 at year 9. The project will incur an initial cost of $30,000. The cost of capital for the project is 12%.

a. What is the project's NPV?

b. What is the project's profitability index?

2. A machine that cost $80,000 is expected to have a useful life of 10 years. Its salvage value at the end of the period is estimated to be zero. The machine is expected to save the company $16,000 a year before taxes and depreciation. Depreciation is based on the straight line method. The tax rate is 40%.

a. What is the IRR of the investment?

b. What is the project's payback period?

c. What is the project's discounted payback period?

Reference no: EM132668154

Questions Cloud

Comment on the library assertion : The library indicated that the cost of the tickets would be deductible for Federal income tax purposes. Comment on the library's assertion
Find cost per equivalent unit of conversion for march : Compute the cost per equivalent unit of conversion for the month of March. Alpha uses the weighted-average process costing method.
What is the setting where the prevention occurs : Remember to follow course guidelines on Forum Posting. Respond to the prompt fully--read the discussion prompt questions carefully. Respond to your classmates.
Discuss the deductibility of the points : To sell the residence, Rachel agreed to pay $5,500 in points related to Thomas's mortgage. Discuss the deductibility of the points
What is the project profitability index : A firm is evaluating a project that yields the following after-tax net cash flows: $7,000 a year for 8 years and -$3,000 at year 9. The project
Determine the cost per equivalent unit of direct material : Find and Determine the cost per equivalent unit of direct material and the cost per equivalent unit of conversion for the month of March
BIM301 Maintenance Management Assignment : BIM301 Maintenance Management Assignment Help and Solution, Emirates College of Technology - Assessment Writing Service
Business become more competitive and profitable : Describe the topic and explain how it helps a business become more competitive and profitable.
How much jayden include in determining itemized deductions : Before considering any limitations on these deductions, how much can Jayden include in determining his itemized deductions for 2019

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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