Albury Company is adding a new assembly line at a cost of $8.5 million. The company...
Albury Company is adding a new assembly line at a cost of $8.5 million. The company expects the project to generate cash flows of $2 million, $3 million, $4 million, and $5 million over the next four years. Its cost of capital is 16 percent. What is the net present value of this project? Select one: A. $1,213,909 B. $905,888 C. $777,713 D. $645,366
Homework Answers
We see that the net present value of the project is given as
equal
to=-8.5*10^6+2*10^6/1.16+3*10^6/1.16^2+4*10^6/1.16^3+5*10^6/1.16^4=777712.8185
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Albury Company is adding a new assembly line at a cost of $8.5
million. The company...
Jamaica Corp. is adding a new assembly line at a cost of $8.5 million. The firm...
Jamaica Corp. is adding a new assembly line at a cost of $8.5 million. The firm expects the project to generate cash flows of $2 million, $3 million, $4 million, and $5 million over the next four years. Its cost of capital is 16 percent. Net present value: What is the MIRR and should company add the new assembley line? 18.58%, no 18.57%, yes 18%, no 19.87%, no
A company is in the process of constructing a new plant at a cost of $20...
A company is in the process of constructing a new plant at a cost of $20 million. It expects the project to generate cash flows of 58 million $6 million and 511 million over the next three years. The cost of capital is 18.2 percent pa. What is the net present value of this project? (in millions to three decimals) Select one a. 5-2.276 O b. $37.724 Oc$-5.005 d. 5-1.495 A company is in the process of constructing a new...
Strange Manufacturing Company is purchasing a production facility at a cost of 521 million. The company...
Strange Manufacturing Company is purchasing a production facility at a cost of 521 million. The company expects the project to generate annual cash flows of $7 million over the next five years. Its cost of capital is 18 percent. What is the net present value of this project? (Round to the nearest dollar) Select one: A. 5890,197 O O O B. 51,213,909 C. $905,888 D. $777,713
Strange Manufacturing Company is purchasing a production facility at a cost of $21 million. The company expects the proj...
Strange Manufacturing Company is purchasing a production facility at a cost of $21 million. The company expects the project to generate annual cash flows of $7 million over the next five years. Its cost of capital is 18 percent. What is the net present value of this project? (Round to the nearest dollar)
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Additional WileyPLUS Problem 13-1 Tamarisk Corporation is considering adding a new product line. The cost of...
Additional WileyPLUS Problem 13-1
Tamarisk Corporation is considering adding a new product line.
The cost of the factory and equipment to produce this product is
$1,780,000. Company management expects net cash flows from the sale
of this product to be $390,000 in each of the next eight
years.
If Tamarisk uses a discount rate of 11 percent for projects like
this, what is the net present value of this project?
(Do not round intermediate calculations. Round answer
to 0 decimal...
1 pts Question 10 Strange Manufacturing Company is considering the purchase of a production facility at...
1 pts Question 10 Strange Manufacturing Company is considering the purchase of a production facility at a cost of $21 million. The firm expects the project to generate annual cash flows of $7 million over the next five years. Its cost of capital is 18 percent. What is the net present value of this project and should Strange purchase the facility? (Do not round intermediate computations. Round final answer to nearest dollar.) $890,197, No $1,213,909, No $890,197, Yes $1,213,909, Yes
Suppose your company is thinking of purchasing a new assembly line for $900,000 in initial investment...
Suppose your company is thinking of purchasing a new assembly line for $900,000 in initial investment cost.The current interest rate is 6 percent.The new line is expected to last for four years and has no salvage value. It is anticipated that the new line will generate the following cash flows: Year 1 $500,000 Year 2 $375,000 Year 3 $ 25,000 Year 4 $ 20,000 1. This sums to greater than $900,000. Shouldn’t the company buy the assembly line? Why or why not? ( don't have to...
Arc Real Estate Company is planning to invest in a new development. The cost of the...
Arc Real Estate Company is planning to invest in a new development. The cost of the project will be $23 million and is expected to generate cash flows of $14,000,000, $11,750,000, and $6,350,000 over the next three years. The company's cost of capital is 20 percent. What is the internal rate of return on this project? (Round to the nearest percent.) HINT: Use a financial calculator or the Excel function: =IRR(values,[guess])?
Case: Shrieves Casting Company is considering adding a new line to its product mix, and the...
Case: Shrieves Casting Company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by Sidney Johnson, a recently graduated MBA. The production line would be set up in unused space in the main plant. The machinery’s invoice price would be approximately $200,000, another $10,000 in shipping charges would be required, and it would cost an additional $30,000 to install the equipment. The machinery has an economic life of 4 years, and...
A company is in the process of constructing a new plant at a cost of $20 million. It expects the project to generate cash flows of 58 million $6 million and 511 million over the next three years. The cost of capital is 18.2 percent pa. What is the net present value of this project? (in millions to three decimals) Select one a. 5-2.276 O b. $37.724 Oc$-5.005 d. 5-1.495 A company is in the process of constructing a new...
Strange Manufacturing Company is purchasing a production facility at a cost of 521 million. The company expects the project to generate annual cash flows of $7 million over the next five years. Its cost of capital is 18 percent. What is the net present value of this project? (Round to the nearest dollar) Select one: A. 5890,197 O O O B. 51,213,909 C. $905,888 D. $777,713
Additional WileyPLUS Problem 13-1
Tamarisk Corporation is considering adding a new product line.
The cost of the factory and equipment to produce this product is
$1,780,000. Company management expects net cash flows from the sale
of this product to be $390,000 in each of the next eight
years.
If Tamarisk uses a discount rate of 11 percent for projects like
this, what is the net present value of this project?
(Do not round intermediate calculations. Round answer
to 0 decimal...
1 pts Question 10 Strange Manufacturing Company is considering the purchase of a production facility at a cost of $21 million. The firm expects the project to generate annual cash flows of $7 million over the next five years. Its cost of capital is 18 percent. What is the net present value of this project and should Strange purchase the facility? (Do not round intermediate computations. Round final answer to nearest dollar.) $890,197, No $1,213,909, No $890,197, Yes $1,213,909, Yes
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