What is the projects npv

Assignment Help Finance Basics
Reference no: EM131488547

Question: (NPV with varying required rates of return) Strada Company is considering purchasing new machinery for its business line. This investment required an initial outlay of $200,000 and will generate free cash inflow of $20,000 per year for 15 years.

a. If the required rate of return is 12 percent, what is the project's NPV?

b. If the required rate of return is 16 percent, what is the project's NPV?

c. Would the project be accepted under part (a) or (b)?

d. Calculate the project's IRR.

Reference no: EM131488547

Questions Cloud

Identify the company value chain components : Identify the company's value chain components and differentiate between its global and domestic value streams.
Principles of applied business research : You will demonstrate your proficiency in the course competencies and assessment criteria
Specific international exchange markets : What are some examples of corporations being listed in specific international exchange markets?
Prepare a scope statement for the transition project : Prepare a scope statement for the transition project. Identify the most logical project sponsor and justify your choice with at least two supporting reasons.
What is the projects npv : (NPV with varying required rates of return) Strada Company is considering purchasing new machinery for its business line. This investment required an initial.
Future employment potential of graduates : Find information about the future employment potential of graduates in your major field of study by using at least five (5) Web sources.
Examples of possible repercussions of not providing employee : From the e-Activity and the text, determine two (2) examples of possible repercussions of not providing employees with performance feedback in a timely manner.
What is your annualized holding period return : What is your annualized holding period return (annual percentage rate)?
What is the project npv using new required rate of return : (NPV with different required rates of return) Mooby's is considering building a new theme park. After future cash flows were estimated, but before the project.

Reviews

Write a Review

Finance Basics Questions & Answers

  Explain the scale and impact of financial crisis

FIN200 Assignment, T1 2016. Explain the scale and impact of financial crisis in economies of different countries including your own country, identify some of proposed reforms

  What actions must nordens central bank take

If Norden maintains its commitment to the crawling peg, what actions must Norden's central bank take? What would speculators do?

  Calculate present value of government subsidy

The program requires $30K to run next year in State A or $16K in State B (50% chance either state occurs). The Government will offer $5000 is State A occurs. Without the offer, the project's cash flows can be discounted at 15%, while the risk free..

  What is an enterprise network

What is an enterprise network? What are the three technology layers important in backbone design? Explain how routed backbones work.

  Company manufactures components for personal decision

Cindy and Robert Castillo founded the Castillo Products Company in 2008. The company manufactures components for personal decision assistant products and for other handheld electronic products.

  What was the rate of price appreciation for year

Electronics, Inc. common stock returned a nifty 22.68% rate of return last year. The dividend amount was $0.25 a share which equated to a dividend yield of 0.84%. What was the rate of price appreciation (capital gain) for the year?

  What are the five steps required for effective product

what are the five steps required for effective product positioning? give an example of a product-positioning matrix for

  Discounted payback period

A firm wants to get their money back ASAP on a project. a) If the company's cost of capital is 10%, what is the discounted payback period on the following project:

  Compute the dividends over the next five years

Compute the dividends over the next five years. (Do not round intermediate calculations and round your final answers to 3 decimal places.)

  Are deana and eric partners

Deana hired Eric to work with her as co-counsel on criminal cases. He recieved fifty percent of the fee on those cases. Are Deana and Eric partners? Explain.

  Estimate both the apr and the apy

What is the true interest cost of skipping the discount and paying on day 40? Estimate both the APR and the APY.

  Calculate the firm total-debt-to-assets ratio

Calculate the firm’s total-debt-to-assets ratio. Assume that the firm’s prior year-end total liabilties balance was $2.4 million and the firm's prior year-end total assets balance was $5 million.

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