ZuoTi.Pro
Question

A Company has been offered a five years contract to provide components to a car manufacturer. If they accept that project, th
business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

NPV = -4505 EUR

1 2 B Year Cashflow Present value 0 -1,00,000 -1,00,000.00 1 50,000 42,372.88 2 50,000 35,909.22 -50,000 -30,431.54 50,000 25

Please do rate me and mention doubts, if any, in the comments section.

0 0
Add a comment
Know the answer?
Add Answer to:
A Company has been offered a five years contract to provide components to a car manufacturer....
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

  • Next Activity A Company has been offered a five years contract to provide components to a...

    Next Activity A Company has been offered a five years contract to provide components to a car manufacturer. If they accept that project, there will be an initial investment of 300,000 EUR, an extra expense of 50,000 EUR in year 3, and yearly revenues of 75,000 EUR. The company wishes to gain a 3% at least (use this as a discount rate). What is the NPV of this operation? (Write the answer with no decimals) Please upload an excel file...

  • Financial Management MGMT8500 Case study on NPV Tech Help Inc. has been offered a new contract....

    Financial Management MGMT8500 Case study on NPV Tech Help Inc. has been offered a new contract. The firm needs to determine whether the contract will be profitable. The new contract will generate 800 billing hours at $125 per year for 5 years. The variable costs, labour will be $32 an hour (including fringe benefits). The fixed costs include 3 vehicle for the employees to service customers at their locations will be $500 per month per car. Other fixed costs will...

  • Your factory has been offered a contract to produce a part for a new printer. The...

    Your factory has been offered a contract to produce a part for a new printer. The contract would last for three years, and your cash flows from the contract would be $4.93 million per year. Your upfront setup costs to be ready to produce the part would be $7.93 million. Your discount rate for this contract is 8.2%. a. What is the IRR? b. The NPV is $4.73 million, which is positive so the NPV rule says to accept the...

  • Your factory has been offered a contract to produce a part for a new printer. The...

    Your factory has been offered a contract to produce a part for a new printer. The contract would last for three years, and your cash flows from the contract would be $5.05 million per year. Your upfront setup costs to be ready to produce the part would be $7.92 million. Your discount rate for this contract is 7.7%. a. What is the IRR? b. The NPV is $5.17 million, which is positive so the NPV rule says to accept the...

  • Your factory has been offered a contract to produce a part for a new printer. The...

    Your factory has been offered a contract to produce a part for a new printer. The contract would last for three​ years, and your cash flows from the contract would be $5.05 million per year. Your upfront setup costs to be ready to produce the part would be $7.94 million. Your discount rate for this contract is 8.3%. a. What is the​ IRR? b. The NPV is $5.00 million, which is positive so the NPV rule says to accept the...

  • Your factory has been offered a contract to produce a part for a new printer. The...

    Your factory has been offered a contract to produce a part for a new printer. The contract would last for three years, and your cash flows from the contract would be $5.08 million per year. Your upfront setup costs to be ready to produce the part would be $7.92 million. Your discount rate for this contract is 8.2%. a. What is the IRR? b. The NPV is $5.12 million, which is positive so the NPV rule says to accept the...

  • Your factory has been offered a contract to produce a part for a new printer. The...

    Your factory has been offered a contract to produce a part for a new printer. The contract would last for three​ years, and your cash flows from the contract would be $ 5.08 million per year. Your upfront setup costs to be ready to produce the part would be $ 8.08 million. Your discount rate for this contract is 8.5 %. a. What is the​ IRR? b. The NPV is $ 4.89 ​million, which is positive so the NPV rule...

  • Your factory has been offered a contract to produce a part for a new printer. The...

    Your factory has been offered a contract to produce a part for a new printer. The contract would last for three​ years, and your cash flows from the contract would be $5.01 million per year. Your upfront setup costs to be ready to produce the part would be $8.07 million. Your discount rate for this contract is 8.3%. a. What is the​ IRR? b. The NPV is $4.77 million, which is positive so the NPV rule says to accept the...

  • Your factory has been offered a contract to produce a part for a new printer. The...

    Your factory has been offered a contract to produce a part for a new printer. The contract would last for three years, and your cash flows from the contract would be $4.97 million per year. Your upfront setup costs to be ready to produce the part would be $7.99 million. Your discount rate for this contract is 8.1%. a. What is the IRR? b. The NPV is $4.80 million, which is positive so the NPV rule says to accept the...

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