Homework Answers
We see that the net present value or NPV of the project is given
as equal to=(-21+7/18%*(1-1/1.18^5))*10^6=890197.1466
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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 $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)
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
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...
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
Barcode Biz has invested in new machinery at a cost of $1,450,000. This investment is expected...
Barcode Biz has invested in new machinery at a cost of $1,450,000. This investment is expected to produce cash flows of $640,000, $715,000, and $823,000 over the next three years. If the opportunity cost of capital is 13 per cent per annum what is the NPV of this project (rounded to the nearest dollar)? Select one: A. $467,273 B. $310,054 C. $299,099 D. $246,702 A company is considering an investment that will cost $852,000 and have a useful life of...
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
15.The ABC Resort is redoing its golf course at a cost of $782,000. It expects to...
15.The ABC Resort is redoing its golf course at a cost of $782,000. It expects to generate cash flows of $406,000, $788,000 and $155,000 over the next three years. If the appropriate discount rate for the company is 12.0 percent, what is the NPV of this project (to the nearest dollar)? Select one: a. $394397 b. $319015 c. $201049 d. $1883015 16.ABC Limited has a stable sales track record but does not expect to grow in the future. Its last...
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])?
FLIR is considering the purchase of a new manufacturing facility to produce drones that would cost...
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...
Larson Manufacturing is considering purchasing a new injection-molding machine for $270,000 to expand its production capacity....
Larson Manufacturing is considering purchasing a new injection-molding machine for $270,000 to expand its production capacity. It will cost an additional $20,000 to do the site preparation. With the new injection-molding machine installed, Larson Manufacturing expects to increase its revenue by $87,000 per year. The machine will be used for six years, with an expected salvage value of $75,000. At an interest rate of 10%, would the purchase of the injection-molding machine be justified? The present worth of the project...
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
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...
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