you are evaluating purchasing the rights to a project that will generate after tax expected cash...
Homework Answers
| PV of annual after tax cash inflows = 84000*(1.125^5-1)/(0.125*1.125^5) = | $ 2,99,087.74 |
| PV of addl. cash inflow at EOY 5 = 1000000/1.125^5 = | $ 5,54,928.96 |
| Total PV of cash inflows | $ 8,54,016.70 |
| Less: Initial cash outflow | $ 6,08,000.00 |
| NPV | $ 2,46,016.70 |
Add Answer to:
you
are evaluating purchasing the rights to a project that will
generate after tax expected cash...
You are evaluating purchasing the rights to a project that will generate after tax expected cash...
You are evaluating purchasing the rights to a project that will generate after tax expected cash flows of $96k at the end of each of the next five years, plus an additional $1,000k at the end of the fifth year as the final cash flow. You can purchase this project for $509k. If your firm's cost of capital (aka required rate of return) is 15.8%, what is the NPV of this project? Provide your answer in units of $1000, thus,...
A project is expected to generate the following cash flows: Year Project after-tax cash flows -$350...
A project is expected to generate the following cash flows: Year Project after-tax cash flows -$350 150 -25 300 The project's cost of capital is 10%, calculate this project’s MIRR.
question #8 A project is expected to generate the following cash flows: Year Project after-tax cash...
question #8 A project is expected to generate the following cash flows: Year Project after-tax cash flows on nimi -$350 150 -25 300 The project's cost of capital is 10%, calculate this project's MIRR. Fill in the blank
You are evaluating a project that will cost $493,000, but is expected to produce cash flows...
You are evaluating a project that will cost $493,000, but is expected to produce cash flows of $128,000 per year for 10 years, with the first cash flow in one year. Your cost of capital is 11.3% and your companys preferred payback period is three years or less. a. What is the payback period of this project? b. Should you take the project if you want to increase the value of the company? If you want to increase the value...
You are evaluating a project that will cost $504,000, but is expected to produce cash flows...
You are evaluating a project that will cost $504,000, but is expected to produce cash flows of $123,000 per year for 10 years, with the first cash flow in one year. Your cost of capital is 10.9% and your company's preferred payback period is three years or less. a. What is the payback period of this project? b. Should you take the project if you want to increase the value of the company? a. What is the payback period of...
Paccione Paving is considering purchasing a unique piece of equipment for a road construction project that...
Paccione Paving is considering purchasing a unique piece of equipment for a road construction project that will last five years. At the end of the five-year project, Paccione will no longer need the equipment. The equipment will cost $1,225,000, will be depreciated straight-line over seven years, and will be sold for $415,000 at the end of the project. The project will generate additional revenues of $750,000 with annual expenses of $165,000. The project will require an initial investment in net...
Steamboat Springs Furniture, Inc., is considering purchasing a new finishing lathe that costs $61,554.00. The lathe...
Steamboat Springs Furniture, Inc., is considering purchasing a new finishing lathe that costs $61,554.00. The lathe will generate revenues of $97,844.00 per year for five years. The cost of materials and labor needed to generate these revenues will total $50,561.00 per year, and other cash expenses will be $11,338.00 per year. The machine is expected to sell for $9,813.00 at the end of its five-year life and will be depreciated on a straight-line basis over five years to zero. Steamboat...
Project A costs $5,500 and will generate annual after-tax net cash inflows of $1,700 for five...
Project A costs $5,500 and will generate annual after-tax net cash inflows of $1,700 for five years. What is the NPV using 12% as the discount rate? Round your present value factor to three decimal places and final answer to the nearest dollar.
An investment project requires a net investment of $200 million. The project is expected to generate...
An investment project requires a net investment of $200 million. The project is expected to generate annual net cash flows of $25 million for the next 15 years with a one-time end of project cash flow of $3 million. The firm's cost of capital is 14 percent and marginal tax rate is 40 percent. a) Evaluate the project using the NPV method and state whether or not the project should be accepted. b) Evaluate the project using the IRR method...
Suppose you are evaluating a project with the expected future cash inflows shown in the following...
Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project's net present value (NPV). You know project's initial cost is $1,075,000 and project's regular payback period is 2.5 4 years. . Cash Flow $375,000 Year 10 Year 500,000 450,000 If the project's weighted average cost of capital (WACC) is 8%, find the project's NPV (rounded to the nearest dollar). Show all your work in...
question #8 A project is expected to generate the following cash flows: Year Project after-tax cash flows on nimi -$350 150 -25 300 The project's cost of capital is 10%, calculate this project's MIRR. Fill in the blank
You are evaluating a project that will cost $504,000, but is expected to produce cash flows of $123,000 per year for 10 years, with the first cash flow in one year. Your cost of capital is 10.9% and your company's preferred payback period is three years or less. a. What is the payback period of this project? b. Should you take the project if you want to increase the value of the company? a. What is the payback period of...
Paccione Paving is considering purchasing a unique piece of equipment for a road construction project that will last five years. At the end of the five-year project, Paccione will no longer need the equipment. The equipment will cost $1,225,000, will be depreciated straight-line over seven years, and will be sold for $415,000 at the end of the project. The project will generate additional revenues of $750,000 with annual expenses of $165,000. The project will require an initial investment in net...
Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project's net present value (NPV). You know project's initial cost is $1,075,000 and project's regular payback period is 2.5 4 years. . Cash Flow $375,000 Year 10 Year 500,000 450,000 If the project's weighted average cost of capital (WACC) is 8%, find the project's NPV (rounded to the nearest dollar). Show all your work in...
Most questions answered within 3 hours.
-
How would you train your employees to avoid risks of using
mobile devices?
asked 1 minute ago -
Assume Kw = 1.01 ✕ 10−14
For pure water, we can calculate [H3O+ ] = [OH...
asked 58 minutes ago -
Suppose that on a temperature scale X, water boils at 203.0°X
and freezes at -105.7°X. What...
asked 1 hour ago -
BaS crystallizes in a cubic unit cell with S2- ions on each
corner and each face....
asked 2 hours ago -
A. 0≤P(Oi)≤10≤P(Oi)≤1 for each i
B. P(Oi)≤0P(Oi)≤0
C. P(Oi)=1+P(OCi)P(Oi)=1+P(OiC)
D. P(Oi)≥1P(Oi)≥1
If an experiment consists of...
asked 3 hours ago -
A battery has an emf of 9.20V and an internal resistance of 1.20
ohm. a)What resistance...
asked 3 hours ago -
The area of an elastic circular loop decreases at a constant
rate, dA/dt = −6.60×10−3 m2/s...
asked 4 hours ago -
The denaturation of proteins can be described by the
equilibrium
F⇌U
where F and U represent...
asked 6 hours ago -
Please answer what the maximum and minimum force is, and the
angle on the ion is...
asked 6 hours ago -
implement a program that reads a number of rows and a symbol.
The program will draw...
asked 6 hours ago -
Assume that when adults with smartphones are randomly selected,
45% use them in meetings or classes....
asked 6 hours ago -
Determine the number of formula units of
Na2SO4 and moles of oxygen contained in 8.11
moles...
asked 6 hours ago