Homework Answers
| Time line | 0 | 1 | 2 | 3 | |||
| Cost of new machine | -118000 | ||||||
| Initial working capital | -16000 | ||||||
| =Initial Investment outlay | -134000 | ||||||
| 100.00% | |||||||
| Depreciation | Cost of equipment/no. of years | -39333.33 | -39333.33 | -39333.33 | 0 | =Salvage Value | |
| =after tax operating cash flow | 45000 | 42750 | 40612.5 | ||||
| reversal of working capital | 16000 | ||||||
| +Proceeds from sale of equipment after tax | =selling price* ( 1 -tax rate) | 42350 | |||||
| +Tax shield on salvage book value | =Salvage value * tax rate | 0 | |||||
| =Terminal year after tax cash flows | 58350 | ||||||
| Total Cash flow for the period | -134000 | 45000 | 42750 | 98962.5 | |||
| Discount factor= | (1+discount rate)^corresponding period | 1 | 1.115 | 1.243225 | 1.3861959 | ||
| Discounted CF= | Cashflow/discount factor | -134000 | 40358.744 | 34386.374 | 71391.426 | ||
| NPV= | Sum of discounted CF= | 12136.54 |
Add Answer to:
Question 17 10 pts Western Tech is considering a new project that will require $118,000 of...
Question 1 Azalea Berhad is considering a new project. The project will require RM400,000 for new...
Question 1 Azalea Berhad is considering a new project. The project will require RM400,000 for new fixed assets, RM150,000 for additional inventory and RM35,000 for additional accounts receivable. Short term debt is expected to increase by RM100,000. The project has a five-year life. The fixed assets will be depreciated straight-line to a zero-book value over the life of the project. At the end of the project, fixed assets can be sold for 25% of their original cost. The net working...
5) Lakeside Winery is considering expanding its winemaking operations. The expansion will require new equipment cos...
5) Lakeside Winery is considering expanding its winemaking operations. The expansion will require new equipment costing $675,000 that would be depreciated on a straight-line basis to zero over the 5-year life of the project. The equipment will have a salvage value of $181,000 at the end of the project. The project requires 551,000 initially for networking capital, which will be recovered at the end of the project. The operating cash flow will be $187.600 a year What is the net...
IBT Tech Inc is considering a new 3-year investment project that requires an initial fixed asset...
IBT Tech Inc is considering a new 3-year investment project that requires an initial fixed asset investment of $4.49 million. The fixed asset will be depreciated straight-line to zero over its three-year life. The project is estimated to generate $2,950,000 in sales per year with additional costs of $952,000 per year. The tax rate is 30% and the required return (appropriate discount rate) is 16%. The fixed asset should have a market (or salvage) value of $595,000 at the end...
IBT Tech Inc is considering a new 3-year investment project that requires an initial fixed asset...
IBT Tech Inc is considering a new 3-year investment project that requires an initial fixed asset investment of $4.49 million. The fixed asset will be depreciated straight-line to zero over its three-year life. The project is estimated to generate $3,010,000 in sales per year with additional costs of $905,000 per year. The tax rate is 30% and the required return (appropriate discount rate) is 16%. The fixed asset should have a market (or salvage) value of $595,000 at the end...
3: Margarite's Enterprises is considering a new project. The project will require $325,000 for new fixed...
3: Margarite's Enterprises is considering a new project. The project will require $325,000 for new fixed assets, $160,000 for additional inventory and $35,000 for additional accounts receivable. Short-term debt is expected to increase by $100,000 and long-term debt is expected to increase by $300,000. The project has a 5-year life. The fixed assets will be depreciated straight-line to a zero book value over the life of the project. At the end of the project, the fixed assets can be sold...
(Calculating project cash flows and NPV) You are considering new elliptical trainers and you feel you...
(Calculating project cash flows and NPV) You are considering new elliptical trainers and you feel you can sell 5 comma 000 of these per year for 5 years (after which time this project is expected to shut down when it is learned that being fit is unhealthy). The elliptical trainers would sell for $1 comma 000 each with variable costs of $500 for each one produced, and annual fixed costs associated with production would be $1 comma 000 comma 000....
Judson Industries is considering a new project. The project will initially require $749,000 for new fixed...
Judson Industries is considering a new project. The project will initially require $749,000 for new fixed assets, $238,000 for additional inventory, and $25,000 for additional accounts receivable. Accounts payable is expected to increase by $70,001. The fixed assets will belong in a 30% CCA class. At the end of the project, in four years' time, the fixed assets can be sold for 40% of their original cost. The net working capital will return to its original level at the end...
Judson Industries is considering a new project. The project will initially require $749,000 for n...
Judson Industries is considering a new project. The project will initially require $749,000 for new fixed assets, $238,000 for additional inventory, and $25,000 for additional accounts receivable. Accounts payable is expected to increase by $70,001. The fixed assets will belong in a 30% CCA class. At the end of the project, in four years' time, the fixed assets can be sold for 40% of their original cost. The net working capital will return to its original level at the end...
Your company is considering a project which will require the purchase of $785,000 in new equipment....
Your company is considering a project which will require the purchase of $785,000 in new equipment. The company expects to sell the equipment at the end of the project for 25% of its original cost, but some assets will remain in the CCA class. Annual sales from this project are estimated at $284,000. Initial net working capital equal to 35.50% of sales will be required. All of the net working capital will be recovered at the end of the project....
23. Lakeside Winery is considering expanding its winemaking operations. The expansion will require new equipment costing...
23. Lakeside Winery is considering expanding its winemaking operations. The expansion will require new equipment costing $708,000 that would be depreciated on a straight-line basis to a zero balance over the four-year life of the project. The equipment can be sold for $220,000 after the four years. The project requires $46,000 initially for net working capital, all of which will be recovered at the end of the project. The projected operating cash flow is $211,500 a year. What is the...
5) Lakeside Winery is considering expanding its winemaking operations. The expansion will require new equipment costing $675,000 that would be depreciated on a straight-line basis to zero over the 5-year life of the project. The equipment will have a salvage value of $181,000 at the end of the project. The project requires 551,000 initially for networking capital, which will be recovered at the end of the project. The operating cash flow will be $187.600 a year What is the net...
3: Margarite's Enterprises is considering a new project. The project will require $325,000 for new fixed assets, $160,000 for additional inventory and $35,000 for additional accounts receivable. Short-term debt is expected to increase by $100,000 and long-term debt is expected to increase by $300,000. The project has a 5-year life. The fixed assets will be depreciated straight-line to a zero book value over the life of the project. At the end of the project, the fixed assets can be sold...
Judson Industries is considering a new project. The project will initially require $749,000 for new fixed assets, $238,000 for additional inventory, and $25,000 for additional accounts receivable. Accounts payable is expected to increase by $70,001. The fixed assets will belong in a 30% CCA class. At the end of the project, in four years' time, the fixed assets can be sold for 40% of their original cost. The net working capital will return to its original level at the end...
Most questions answered within 3 hours.
-
1- What is the energy of a photon with a frequency of 7.01 ×
10¹⁴ s⁻¹?...
asked 7 minutes ago -
Cesar needs to make a decision whether to fertilize his garden
or not. His profit depends...
asked 10 minutes ago -
Illustrate the Substitution Effect, Income Effect and Total
Effect of a normal good and an inferior...
asked 9 minutes ago -
Your company has six-sigma conformance for each of 10 component
that are a part if a...
asked 22 minutes ago -
Explain the buffering components of urine, the chemical
equation, where the system is found and find...
asked 28 minutes ago -
The financial records of Leon Paul Inc. were destroyed by fire
at the end of 2017....
asked 30 minutes ago -
The normal-curve approximation can also be used for discrete
distribution other than the binomial distribution. For...
asked 1 hour ago -
1. Find the following z values for the standard normal
variable Z. (You may find it...
asked 56 minutes ago -
Lakeside Motors will sell you a $9000 car for $225 a month for 60
months. What...
asked 46 minutes ago -
how immigrants foster innovations and how it lead to economic
growth of the host country????
"Not...
asked 58 minutes ago -
What are some of the methods that creditors use to
reduce risk in credit transactions?
asked 52 minutes ago -
1 Explain HOW you would use the scientific method to test
which helps kids lose weight:...
asked 59 minutes ago