ZuoTi.Pro
Question

Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $163,000 and be depreciated on a
Ο $2,714 Ο $5,317 Ο $2,961 Ο $4140 Ο $6,223
business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1
NPV = Present value of cash inflwos - present value of cash outflows
Year 0 1 2 3 4
Cost of fixed assets -163000
Net Working capital -2650
Sales 100000 100000 100000 100000
Variable cost 27450 27450 27450 27450
Fixed cost 12050 12050 12050 12050
Depreciation 54327.9 72453.5 24140.3 196.365
Income before tax 6172.1 -11953.5 36359.7 60303.635
Less: tax 2098.514 -4064.19 12362.298 20503.2359
Net Income 4073.586 -7889.31 23997.402 39800.3991
Add: Depreciation 54327.9 72453.5 24140.3 196.365
Recovery of working capital 2650
Cash flows -165650 58401.486 64564.19 48137.702 42646.7641
PVF 1 0.900900901 0.811622433 0.731191381 0.658730974
Present value of cash flows -165650 52613.95135 52401.74499 35197.87282 28092.74446
NPV 2656.313617
Hence, the answer ois $2,714 approx.
0 0
Add a comment
Know the answer?
Add Answer to:
Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $163,000 and...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $195,000 and...

    Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $195,000 and be depreciated on a 3-year MACRS and have no salvage value. The MACRS percentages each year are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. The project will have annual sales of $132,000, variable costs of $35,500, and fixed costs of $12,850. The project will also require net working capital of $3,450 that will be returned at the end of the project....

  • Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $173,000 and...

    Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $173,000 and be depreciated on a 3-year MACRS and have no salvage value. The MACRS percentages each year are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. The project will have annual sales of $110,000, variable costs of $27,700, and fixed costs of $12,300. The project will also require net working capital of $2,900 that will be returned at the end of the project....

  • Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $173,000 and...

    Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $173,000 and be depreciated on a 3-year MACRS and have no salvage value. The MACRS percentages each year are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. The project will have annual sales of $110,000, variable costs of $27,700, and fixed costs of $12,300. The project will also require net working capital of $2,900 that will be returned at the end of the project....

  • Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $201,000 and...

    Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $201,000 and be depreciated on a 3-year MACRS and have no salvage value. The MACRS percentages each year are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. The project will have annual sales of $138,000, variable costs of $37,300, and fixed costs of $13,000. The project will also require net working capital of $3,600 that will be returned at the end of the project....

  • Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $159,000 and...

    Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $159,000 and be depreciated on a 3-year MACRS and have no salvage value. The MACRS percentages each year are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. The project will have annual sales of $96,000, variable costs of $27,350, and fixed costs of $11,950. The project will also require net working capital of $2,550 that will be returned at the end of the project....

  • Delia Landscaping is considering a new 4-year project. The equipment necessary would cost $173,000 and be...

    Delia Landscaping is considering a new 4-year project. The equipment necessary would cost $173,000 and be depreciated on a 3-year MACRS to a book value of zero. The MACRS percentages each year are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. At the end of the project, the equipment can be sold for 10 percent of its initial cost. The project will have annual sales of $110,000, variable costs of $27,700, and fixed costs of $12,300. The project...

  • 1) Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $187,000...

    1) Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $187,000 and be depreciated on a 3-year MACRS and have no salvage value. The MACRS percentages each year are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. The project will have annual sales of $124,000, variable costs of $33,100, and fixed costs of $12,650. The project will also require net working capital of $3,250 that will be returned at the end of the...

  • Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment...

    Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.9 million. The fixed asset falls into the 3-year MACRS class (MACRS Table) and will have a market value of $222,600 after 3 years. The project requires an initial investment in net working capital of $318,000. The project is estimated to generate $2,544,000 in annual sales, with costs of $1,017,600. The tax rate is 24 percent and the required return on the project...

  • Bad Company has a new 4-year project that will have annual sales of 7,900 units. The...

    Bad Company has a new 4-year project that will have annual sales of 7,900 units. The price per unit is $19.40 and the variable cost per unit is $7.15. The project will require fixed assets of $89,000, which will be depreciated on a 3-year MACRS schedule. The annual depreciation percentages are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. Fixed costs are $29,000 per year and the tax rate is 35 percent. What is the operating cash flow...

  • Please help and explain how to do this question Bad Company has a new 4-year project...

    Please help and explain how to do this question Bad Company has a new 4-year project that will have annual sales of 8,500 units. The price per unit is $20.00 and the variable cost per unit is $7.75. The project will require fixed assets of $95,000, which will be depreciated on a 3-year MACRS schedule. The annual depreciation percentages are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. Fixed costs are $35,000 per year and the tax rate...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT