financial mathematics, Financial Accounting

Assignment Help:
abc limied is considering whether to invest $90000 in the purchase of a new item of equipment. The equipment would be paid for with a down-payment of $60000 and the payment of the remaining $30000 six weeks later.the company has already spent $8000 on design and feasibility work,and with the operational managemnet team are keen to purchase the equipment quickly.

the equipment is expected to have a life of three years,after which time it should have a resale value$5000.The equipment will be depreciated by the straight-line method over three years.Lt has been estimated that an investment of$20000 in working capital will be needed.

As a resuil of acquiring the equipment,it is expexted that will be an increase in annual cash profits,as follows:
year 1:$37000
year 2:$48000
year 3:$26000

(a)Calculate the expected NPV if the investment,if the cost of capital is 8%

(b)Calculate the expexted IRR of the investment,using the interpolation method and taking 12% as hte cost of capital for calculating another NPV.

Related Discussions:- financial mathematics

What is leveraged lease, Q. What is Leveraged Lease? Leveraged Lease - ...

Q. What is Leveraged Lease? Leveraged Lease - Transaction under which LESSOR borrows funds to acquire property which is leased to a third party. Property and lease rentals are

Product costs and which are period costs, The costs that follow were extrac...

The costs that follow were extracted from the accounting records of various different manufacturers: 1.    Weekly wages of an equipment maintenance worker 2.    Marketing costs

Fin 501, Look closely at the stock market in Fiji. Do a trend analysis of t...

Look closely at the stock market in Fiji. Do a trend analysis of the stock market based on the following: ? The function of the stock market ? The trend analysis of the number of

MAKING A PITCH, SAMPLES PITCH FOR AN ACCOUNTING ASSIGNMENTS

SAMPLES PITCH FOR AN ACCOUNTING ASSIGNMENTS

Evaluate break-even production units, Q. Evaluate Break-Even Production uni...

Q. Evaluate Break-Even Production units? R.S. Manufacturing Ltd. Budgets production of 3,00,000 units at cost of Rs.10 each. The Fixed costs are Rs.20, 00,000. The selling pric

Fair market value, Stepped Up Basis -Usually, the foundation of property ac...

Stepped Up Basis -Usually, the foundation of property acquired by INHERITENCE, BEQUEST or device from a DECENDANT is the FAIR MARKET VALUE of the property on the date of decendant'

I. To disengage government from economic or business activit, i. To disenga...

i. To disengage government from economic or business activities in which it has no competence or in areas where the private sector is more competent. ii. To make the enterprises a

Effect of resolution-liquidation of companies, Effect of Resolution The...

Effect of Resolution The consequences of the resolution to wind up are: 1) The company must cease to carry on its business except so far as is necessary for the beneficial win

Prepare the profit and loss account and balance sheet, MarmadukeMuffett onc...

MarmadukeMuffett once had a girlfriend who ran an antiques business in London'sKings Road. Ever since then, he has been hooked on the furniture trade and now runsMarmaduke'sMarvell

Write Your Message!

Captcha
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