An energy efficient project is anticipated to save $55,000 each year. The system will cost $275,000...
An energy efficient project is anticipated to save $55,000 each year. The system will cost $275,000 to install and will require additional operating costs of $7,500 per year over the 15 year life. If the minimum corporate rate of return is 20%, what is the NPV of the project?
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An energy efficient project is anticipated to save $55,000 each
year. The system will cost $275,000...
Gateway Communications is considering a project with an initial fixed assets cost of $1.49 million that...
Gateway Communications is considering a project with an initial fixed assets cost of $1.49 million that will be depreciated straight-line to a zero book value over the 9-year life of the project. At the end of the project the equipment will be sold for an estimated $246,000. The project will not change sales but will reduce operating costs by $411,000 per year. The tax rate is 34 percent and the required return is 12.1 percent. The project will require $55,000...
Dog Up! Franks is looking at a new sausage system with an installed cost of $450,000....
Dog Up! Franks is looking at a new sausage system with an installed cost of $450,000. This cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the sausage system can be scrapped for $55,000. The sausage system will save the firm $140,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $25,500. If the tax rate is 24 percent and the discount rate...
Kolby’s Korndogs is looking at a new sausage system with an installed cost of $705,000. This...
Kolby’s Korndogs is looking at a new sausage system with an installed cost of $705,000. This cost will be depreciated straight-line to zero over the project’s 6-year life, at the end of which the sausage system can be scrapped for $95,000. The sausage system will save the firm $203,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $55,000. If the tax rate is 25 percent and the discount rate is...
Fox Hollow Franks is looking at a new system with an installed cost of $540,000. This equipment is depreciated at a rate of 20% per year (Class 8) over the project’s five-year life, at the end of which the sausage system can be sold for $80,000. The sausa
Fox Hollow Franks is looking at a new system with an installed cost of $540,000. This equipment is depreciated at a rate of 20% per year (Class 8) over the project’s five-year life, at the end of which the sausage system can be sold for $80,000. The sausage system will save the firm $170,000 per year in pre-tax operating costs, and the system requires an initial investment in net working capital of $29,000. If the tax rate is 34% and...
The Schroeder Corporation is considering the purchase of an system that costs $55,000, with a 5...
The Schroeder Corporation is considering the purchase of an system that costs $55,000, with a 5 year life and no salvage value. The system will generate cost savings over its life of $15,000 per year. The company has a required rate of return of 20% on all its inverstments. 1. Compute the Internal Rate of Return of this investment. 2. Should the company make the investment and why or why not?
Kolby's Korndogs is looking at a new sausage system with an installed cost of $705,000. The...
Kolby's Korndogs is looking at a new sausage system with an installed cost of $705,000. The asset qualifies for 100 percent bonus depreciation and can be scrapped for $95,000 at the end of the project's 5-year life. The sausage system will save the firm $203,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $55,000. If the tax rate is 25 percent and the discount rate is 10 percent, what is...
We are evaluating a project that costs $788,400, has a nine-year life, and has no salvage...
We are evaluating a project that costs $788,400, has a nine-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 75,000 units per year. Price per unit is $52, variable cost per unit is $36, and fixed costs are $750,000 per year. The tax rate is 21 percent, and we require a return of 12 percent on this project. Suppose the projections given for price, quantity,...
BCorp needs 142,000 cartons of screws per year over the next 5 years. It'll cost 1,820,000...
BCorp needs 142,000 cartons of screws per year over the next 5 years. It'll cost 1,820,000 to install equipment. Depreciate the cost, straight-line to 0 over the projects life. In 5 years it can be salvaged at 152,000. Fixed production costs are 267,000 per year and variable production costs are $9.60 per carton. You need initial investment of NWC of $132,000. Tax rate is 22% and you require a 12% rate of return. Price per carton is $16.20. A) What...
show work 18. Thornley Machines is considering a 3-year project with an initial cost of $400,000....
show work
18. Thornley Machines is considering a 3-year project with an initial cost of $400,000. The project will not directly produce any sales but will reduce operating costs by $175,000 a year before taxes. The equipment is depreciated straight-line to a zero book value over the life of the project. At the end of the project the equipment will be sold for an estimated $100,000. The tax rate is 35 percent. The project will require $60,000 in extra inventory...
Dog Up! Franks is looking at a new sausage system with an installed cost of $904,800....
Dog Up! Franks is looking at a new sausage system with an installed cost of $904,800. 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 $139,200. The sausage system will save the firm $278,400 per year in pretax operating costs, and the system requires an initial investment in net working capital of $64,960. If the tax rate is 22 percent and the discount rate...
Dog Up! Franks is looking at a new sausage system with an installed cost of $450,000. This cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the sausage system can be scrapped for $55,000. The sausage system will save the firm $140,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $25,500. If the tax rate is 24 percent and the discount rate...
Kolby's Korndogs is looking at a new sausage system with an installed cost of $705,000. The asset qualifies for 100 percent bonus depreciation and can be scrapped for $95,000 at the end of the project's 5-year life. The sausage system will save the firm $203,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $55,000. If the tax rate is 25 percent and the discount rate is 10 percent, what is...
show work
18. Thornley Machines is considering a 3-year project with an initial cost of $400,000. The project will not directly produce any sales but will reduce operating costs by $175,000 a year before taxes. The equipment is depreciated straight-line to a zero book value over the life of the project. At the end of the project the equipment will be sold for an estimated $100,000. The tax rate is 35 percent. The project will require $60,000 in extra inventory...
Dog Up! Franks is looking at a new sausage system with an installed cost of $904,800. 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 $139,200. The sausage system will save the firm $278,400 per year in pretax operating costs, and the system requires an initial investment in net working capital of $64,960. If the tax rate is 22 percent and the discount rate...
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