Find NPV of 2 Projects, Financial Management

Assignment Help:
Woody Construction is considering a new 3-year expansion project that requires an initial fixed asset investment of $3.186 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will have a market value of $247,800. The project requires an initial investment in net working capital of $354,000. The project is estimated to generate $2,832,000 in annual sales, with costs of $1,132,800. The tax rate is 31 percent and the required return on the project is 10 percent. What is the NPV for this project?

2. Hot Meats is looking at a new sausage system with an installed cost of $436,800. This cost will be depreciated straight-line to zero over the project''s 5-year life, at the end of which the sausage system can be scrapped for $67,200. The sausage system will save the firm $134,400 per year in pretax operating costs, and the system requires an initial investment in net working capital of $31,360. If the tax rate is 31 percent and the discount rate is 9 percent, what is the NPV of the project?

Related Discussions:- Find NPV of 2 Projects

MM., What are the assumptions of MM(Modigliani Miller) approach?

What are the assumptions of MM(Modigliani Miller) approach?

Role of financial intermediaries in the financial system, Role of Financial...

Role of Financial Intermediaries in the financial system: Having designed the instrument, the issuer should then ensure that these financial assets reach the ultimate investor

Risk and advantages associated with company locations, What are some of the...

What are some of the primary advantages when a corporation has operations in countries other than its home country?  What are some of the risks? Foreign operations may decrease

Calculate the total present value of the tax shield, Nortel is considering ...

Nortel is considering the purchase of a new  call routing system.  The system will cost $50M to purchase, an additional $7M to install, and will last for 30 years.  The CCA rate as

., give and explain the seven sources of finance

give and explain the seven sources of finance

Bse-500 and sectoral indices, BSE-500 and Sectoral Indices On August 9,...

BSE-500 and Sectoral Indices On August 9, 1999, another new index was introduced in the market which was based on the data of 500 companies and designated as BSE-500 index. It

Compare the ifrs and gaap revenue recognition policies, SUPERVALU INC . ...

SUPERVALU INC . , a large US retail grocer, had $36.1 billion in sales for its fiscal year ended February 25, 2011. SUPERVALU currently reports using US GAAP. The controller of

Pension reforms, Pension Reforms On January 1, 2004, Pension Funds have...

Pension Reforms On January 1, 2004, Pension Funds have come into force in India. Government servants will have to subscribe to them. The new pension fund system is primarily dr

Lien, A legal claim on exact assets which were used to make loan secure.

A legal claim on exact assets which were used to make loan secure.

Beta, what is the value of beta for this fund ? If the benchmark index for ...

what is the value of beta for this fund ? If the benchmark index for this mutual fund increased by 11.00% during the period covered by beta measure, what was the rate of return for

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