What is the projects npv using a discount rate of 7 should

Assignment Help Finance Basics
Reference no: EM13568307

Big Steve's, makers of swizzle sticks, is considering the purchase of a new plastic stamping machine. This investment requires an intial outlay of $95,000 and will generate net cash inflows of $19,000 per year for 11 years.

a. What is the project's NPV using a discount rate of 7%? Should the project be accepted? Why or why not?

b. What is the project's NPV using a discount rate of 13%? Should the project be accepted? Why or why not?

c. What is this project's internal rate of return? Should the project be accepted? Why or why not?

Reference no: EM13568307

Questions Cloud

A any time prior to maturity on february 1 2029 a : chocolate factorys convertible debentures were issued at their 1000 par value in 2009. at any time prior to maturity
Calculate the cost of equity using the dcf method calculate : berta industries stock has a beta of 1.20. the company just paid a dividend of 0.50 and the dividends are expected to
Beginning with an investment in one companys securities as : beginning with an investment in one companys securities as we add securities of other companies to our portfolio which
A company issued 14 5-year bonds with a par value of : a company issued 14 5-year bonds with a par value of 5000000 on january 1 2003. interest is to be paid seminannually on
What is the projects npv using a discount rate of 7 should : big steves makers of swizzle sticks is considering the purchase of a new plastic stamping machine. this investment
You bought a stock three months ago for 4857 per share the : you bought a stock three months ago for 48.57 per share. the stock paid no dividends. the current share price is
Bobs 16-year 1000 par value bonds pay 12 interest annually : bobs 16-year 1000 par value bonds pay 12 interest annually. the market price of the bonds are 880 and the yield to
Using the straight-line method prepare the issuers journal : a company issued 10-year 9 bonds with a par value of 500000 when the market rate was 10. using the straight-line method
Ending goods in process inv 20000 ending finished goods : information for zip manufacturing followsbeginning raw materaisl inventory 46800beginning goods in process inv.

Reviews

Write a Review

Finance Basics Questions & Answers

  How many yen should you expect in exchange

how many yen should you expect in exchange for one U.S. dollar next year? a. More than 100 b. Either 100 or more than 100 c. 100 d. Either 100 or less than 100 e. Less than 100.

  In which payment are the principal and interest most nearly

In which payment are the principal and the interest most nearly equal to each other?

  How much tier-one capital does this bank have

How much tier-one (or core) capital does this bank have? Tier-two capital?

  What is the present value of the dividends to be received

Three years from now it expects to pay a dividend of $2.50 and then $3.00 in the following two years. What is the present value of the dividends to be received over the next five years if the discount rate is 15 percent.

  What is the approximate cost per month

You own 100 shares of Amazon stock (AMZN) and are concerned that the price will go down. You do not want to sell because you have unrecognized capital gains and are in a high tax bracket.

  The allendale office supply company has a target current

the allendale office supply company has a target current ratio of 2.0 but has experienced some difficulties financing

  What is the implied value of each warrant

Charles River Company has just sold a bond issue with 40 warrants attached. The bonds have a 20-year maturity, an annual coupon rate of 12.0 percent, and they sold at their $1,000 par value. The current yield on similar straight bonds is 15.0 perc..

  What is their yield to maturity

Thatcher Corporation's bonds will mature in 20 years. The bonds have a face value of $1,000 and an 12% coupon rate, paid semiannually. The price of the bonds is $850. The bonds are callable in 5 years at a call price of $1,050. Round your answers ..

  Annualized dividend yield

The S&P 500 Index price is $925.28 and its annualized dividend yield is 1.40%. LIBOR is 4.2%. How many futures contracts will you need to hedge a $25 million portfolio with a beta of 0.9 for one year?

  What is the additional dollar amount

what is the additional dollar amount he will be required to make assuming he can purchase the new shares from the company at a 5% discount?

  Validity is more critical to measurement than reliability a

1. how does technological advancement affect the ability to collect data? provide examples. does this advancement

  Determine agi ad the capital losses to be carried forward

To better understand the rules for offsetting capital losses and how to treat capital losses carried forward, analyze the following data for an unmarried individual for the period for the period 2007 through 2010. No capital loss carryforwards are..

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