When computing the net present value of the project what is

Assignment Help Finance Basics
Reference no: EM13567255

Weichman Inc. has provided the following data concerning an investment project that has been proposed:

Initial investment

$960,000

Annual cash receipts

$624,000

Life of the project

8 years

Annual cash expenses

$281,000

Salvage value

$48,000

The company"s tax rate is 30%. For tax purposes, the entire initial investment will be depreciated over 7 years without any reduction for salvage value. The company uses a discount rate of 15%.

1. When computing the net present value of the project, what is the after-tax cash flow from the salvage value in the final year?

A) $48,000

B) $14,400

C) $33,600

D) $0

2. The net present value of the project is closest to:

A) $299,470

B) $288,483

C) $117,329

D) $128,316

Reference no: EM13567255

Questions Cloud

Analyze the leadership styles of a senior executive ceo cfo : assignment leadership assessmentorganizational leaders are expected to create realistic visions for their companies and
The company uses a discount rate of 19 when computing the : yandell inc. is considering an investment project that would require an initial investment of 310000 and that would
Not sure on how to calculate and record on feb 282012 ace : not sure on how to calculate and record. on feb. 282012 ace company sold 8000000 9 10yr bonds to purchase a new
You are using the fair value option for a qualifying asset : instructions you have been asked to comment on the accounting treatment for various independent transactions by citing
When computing the net present value of the project what is : weichman inc. has provided the following data concerning an investment project that has been proposedinitial
He accrued expenses payable balance on july 1 relates to : select physical therapy inc. is planning its cash payments for operations for the third quarter 2013. the accrued
The difference between these monthly operating profit : zippy inc. manufactures large crates of microwaveable popcorn that are typically sold to distributors. its main factory
Te working capital investment will be released for use : lambert manufacturing has 100000 to invest in either project a or project b. the following data are available on these
Med max buys surgical supplies from a variety of : med max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to hundreds

Reviews

Write a Review

Finance Basics Questions & Answers

  A defined contribution pension plan

a defined-contribution pension plan

  How about geometric average rate of return

XYZ stock price and dividend history are as follows: Year Beginning-of-year Price Dividend paid at Year-End 2010 $100 $4 2011 $110 $4 2012 $90 $4 2013 $95 $4 What is the arithmetic average rate of return? How about geometric average rate of return..

  What rate of return would you earn

The stock of the Health Corporation is currently selling for $20 a share and is expected to pay a $1 dividend at the end of the year. If you bought the stock now and sold it for $23 after receiving the dividend, what rate of return would you earn?

  If the dividend expected throughout the coming year d1 is

the risk-free rate of return rrf is 12 the required rate of return on the market rm 16 and schuler companys stock has

  Should the new issue be undertaken based

If the 1,500,000 additional shares can only be issued at $28 per share and the company can earn 10 percent on the proceeds, should the new issue be undertaken based on earnings per share?

  Consider a european call option on a stock

Consider a European call option on a stock, with 1 year to expiration, and a strike price of 50. Suppose that the risk-free rate is 4% APR with semiannual compounding, and that the call premium (or price) is $1.

  What is your ldquonumberrdquo what might cause your number

what is your ldquonumberrdquo see reading for techniques and tools? what might cause your number to be higher? what

  Small fry pools generally carries an amount of recievables

small fry pools generally carries an amount of recievables equal to 80000 and irs annual credit sales equal 2.4

  Calculate keenan total dividends for 2011

Which of the proceeding policies would you recommend? Restrict your choices to the ones listed, but justify your answers.

  Explain the key assumptions you made in generating

Recommend and justify a long-term asset allocation that is consistent with the investment policy statement you created in Part a. Briefly explain the key assumptions you made in generating your allocation.

  Capm a financial markets security market line sml describes

capm a financial markets security market line sml describesa. the relationship between systematic risk and expected

  Discuss the importance of cash on hand and how it affects

Discuss the importance of cash on hand and how it affects the strength of the business. Would you agree that the amount of cash on hand is a factor when comparing like businesses?

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