West Bank has estimated the cost of a new facility at $1.5 million. At this initial point, organizational costs are expected to reach an additional amount of approx. $500,000.
Yearly net revenues are estimated at $400,000 and the new branch is expected to last 15 years. What is the expected rate of return on this investment? (Round to the nearest whole percent)
6 percent |
21 percent |
18 percent |
32 percent |
none of the above |
West Bank has estimated the cost of a new facility at $1.5 million. At this initial...
. Hamilton State Bank wants to add a new branch office. They have determined that the cost of construction on the new facility will be $1.5 million with another $500,000 in organizational costs. Annual net revenues are projected to be $277,000. If the new branch is expected to last 20 years, what is the expected rate or return on this investment? (Round to the nearest whole percent) A. $929,252 B. 72% C. 15% D. 12.5% ...
t If you consider the last half-a-decade, the number of number of has declined whereas the branches has increased O bankx branche O branches banks O ATMs: banks O mobile banking apps: banks Question 3 0.67 pts AAA Bank is evaluating the addition of a new branch office in DeLand, Fl. New homes exhibit a 10% average growth rate per year. This rate is expected to continue in the coming years. Which factor is AAA Bank accounting for when looking...
Investment Outlay Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $19 million, and production and sales will require an initial $4 million investment in net operating working capital. The company's tax rate is 30%. What is the initial investment outlay? Write out your answer completely. For example, 2 million should be entered as 2,000,000. $ The company spent and expensed $150,000 on research related to the project last year. Would this change your answer?...
A new grocery store cost $30 million in initial investment. It is estimated that the store will generate after-tax cash flows of $2 million each year for the next 5 years. At the end of the 5 years, it can be sold for $40 million. What is the NPV of the project if the risk-adjusted WACC is 10%?
Your company is considering a $500,000 investment, today, in a new production facility. Production would commence two years from today and initial revenues would be realized at the end of the first year of production. Revenues are estimated to be $300,000 for the first production year, but are expected to fall $30,000 each year thereafter because of a forecasted decline in demand. Meanwhile, operating expenses are incurred at the beginning of each production year and are estimated to be $80,000...
FLIR is considering the purchase of a new manufacturing facility to produce drones that would cost $2,650,000. The facility is to be fully depreciated on a straight-line basis over 3 years. It is expected to have a scrap resale value of $250,000 at the end of 3 years. Toxic waste cleanup, at the end of the project life, is expected to cost $500,000, after taxes, Operating revenues from the facility are expected to be $1,950,000, and production costs are estimated...
Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $12 million, and production and sales will require an initial $5 million investment in net operating working capital. The company's tax rate is 40%. What is the initial investment outlay? Write out your answer completely. For example, 2 million should be entered as 2,000,000. $ The company spent and expensed $150,000 on research related to the new project last year. Would this change your answer? Rather...
20. An existing public park serving 1.8 Million visitor/year is to be improved. Initial cost is SR 2.25 Million and the annual operating and maintenance cost starts with SR 0.145 Million during the first year and increases 3%/year thereafter. The planning horizon is 20 years, the salvage value is 32% of the initial cost, and the interest rate is 12%. The minimum additional benefits/visit that will justify the facility improvement is closest to: a) SR 0.18 b) SR 0.30 c)...
James Company purchased a new machine that had an initial cost of $58,000. The estimated life of the machine is six years with no disposal value. If James planned on investing an additional $20,000 at the end of the sixth year, the machine would last an additional four years beyond the time expected. The effective tax rate for James Company is 40-percent and extending the life of the machine will generate a gross margin of $4,000 in each of the...
1.Clydesdale Bank is setting up a brand new branch. The cost of the project will be $1.2 million. The branch will create additional cash flows of $235,000, $412,300, $665,000 and $875,000 over the next four years. The company's cost of capital is 12 percent. What is the internal rate of return on this branch expansion? (Round to the nearest percent.) HINT: Use a financial calculator or the Excel function: =IRR(values,[guess]) Select one: A. 20% B. 23% C. 25% D. 27%...