Initial investment............... $80,000 Annual after-tax cash inflow............. ? Salvage value........................ $0 Net present value................ $13,600 Life...
Initial investment...............
$80,000
Annual after-tax cash inflow.............
?
Salvage value........................
$0
Net present value................
$13,600
Life of the project................
7 years
Discount rate........................
12%
Based on the data given above, the annual cash inflow from the project after the initial investment is closest to... (assume the after-tax cash flows are the same each year)
Select one:
a. $36,428
b. $22,766
c. $23,747
d. $20,509
e. $32,894
Homework Answers
Add Answer to:
Initial investment...............
$80,000
Annual after-tax cash inflow.............
?
Salvage value........................
$0
Net present value................
$13,600
Life...
Calculate the net present value of a project which requires an initial investment of $243,000 and it is expected to gen...
Calculate the net present value of a project which requires an initial investment of $243,000 and it is expected to generate a cash inflow of $50,000 each month for 12 months. Assume that the salvage value of the project is zero. The target rate of return is 12% per annum. Note: Initial Investment = $243,000 Net Cash Inflow per Period = $50,000 Number of Periods = 12 Discount Rate per Period = 12% + 12 = 1%
Calculate the net present value for a 15-year project with an initial investment of $ 0...
Calculate the net present value for a 15-year project with an initial investment of $ 0 and a cash inflow of $2,000 per year. Assume that the firm has an opportunity cost of 13%. Comment on the acceptability of the project. The project's net present value is $____ .
A delivery truck was just purchased for $80,000. It's estimated salvage value at the end of...
A delivery truck was just purchased for $80,000. It's estimated salvage value at the end of its useful life, in 8 years, is $20,000. Assume 25% tax rate, and straight-line depreciation. a. What is the amount of annual depreciation? b. What is the book value after 6 years? C. Assuming the company decides to sell the truck after 6 years of service, and receives $50,000 from the sale, calculate the after-tax net cash inflow from the sale of the truck....
2. Determine the net present value of alternative 2 1. Determine the net present value of...
2. Determine the net present value of alternative 2 1. Determine the net present value of alternative 1. Initial cash investment (net) Interstate Manufacturing is considering either replacing one of its old machines with a new machine or having the old machine overhauled, Information about the two alternatives follows. Management requires a 12% rate of return on its investments (PV of $1. FV of $1. PVA of $1. and FVA of $1) (Use appropriate factor(s) from the tables provided.) Initial...
SHOW ALL YOUR WORKS FOR YOUR CALCULATIONS: Calculate "Initial investment and Expected annual net cash inflow"...
SHOW ALL YOUR WORKS FOR YOUR CALCULATIONS: Calculate "Initial investment and Expected annual net cash inflow" Playmore Products is considering producing toy action figures and sandbox toys. The products require different specialized machines each costing $1 million. Each machine has a five-year life and zero residual value. The two products have different patterns of predicted net cash inflows. (Click the icon to view the data.) Calculate the toy action figure project's payback period. If the toy action figure project had...
Calculate the Net Present Value of a project which requires an initial investment of $255000 and...
Calculate the Net Present Value of a project which requires an initial investment of $255000 and it is expected to generate a cash inflow of $30000 each month for 12 months. Assume that the salvage value of the project is zero. The target rate of return is 14% per annum. Write the formula and calculate NPV. Justify the result.
Calculate the net present value for a five-year project that is expected to generate after-tax cash...
Calculate the net present value for a five-year project that is expected to generate after-tax cash inflows of R 26,000 annually. The initial investment is R 80,000. Management estimates the firm's cost of capital is 14 percent. a) R 9,253.00 b) R 1,130.00 c) R 4,005.00 d) None of the above
Information on four investment proposals is given below: Investment required Present value of cash inflows Net...
Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value Life of the project Investment Proposal B С D $(430,000) $(50,000) $(50,000) $(1,820,000) 631,600 70,500 76,800 2,429, 200 $ 201,600 $ 20,500 $ 26,800 $ 609,200 5 years 7 years 6 years 6 years Required: 1. Compute the project profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference. Investment Proposal...
2. Oriental Corporation has gathered the following data on a proposed investment project: Investment in depreciable...
2.
Oriental Corporation has gathered the following data on a proposed investment project: Investment in depreciable equipment Annual net cash flows Life of the equipment Salvage value Discount rate $ 450,000 $ 90,000 10 years $ 0 78 The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period for the investment would be: Joetz Corporation has gathered the following data on a proposed investment project (Ignore...
Mastery Problem: Net Present Value and Internal Rate of Return Part One Companies use capital investment...
Mastery Problem: Net Present Value and Internal Rate of Return Part One Companies use capital investment analysis to evaluate long-term investments. Capital investment evaluation methods that use present values are (1) Net present value method (NPV) and (2) Internal rate of return (IRR) method. Methods That Use Present Values Of the two capital investment evaluation methods, a defining characteristic NPV and IRR is that they consider the time value of money. This means that money tomorrow is worth less than money today....
Calculate the net present value of a project which requires an initial investment of $243,000 and it is expected to generate a cash inflow of $50,000 each month for 12 months. Assume that the salvage value of the project is zero. The target rate of return is 12% per annum. Note: Initial Investment = $243,000 Net Cash Inflow per Period = $50,000 Number of Periods = 12 Discount Rate per Period = 12% + 12 = 1%
A delivery truck was just purchased for $80,000. It's estimated salvage value at the end of its useful life, in 8 years, is $20,000. Assume 25% tax rate, and straight-line depreciation. a. What is the amount of annual depreciation? b. What is the book value after 6 years? C. Assuming the company decides to sell the truck after 6 years of service, and receives $50,000 from the sale, calculate the after-tax net cash inflow from the sale of the truck....
2. Determine the net present value of alternative 2 1. Determine the net present value of alternative 1. Initial cash investment (net) Interstate Manufacturing is considering either replacing one of its old machines with a new machine or having the old machine overhauled, Information about the two alternatives follows. Management requires a 12% rate of return on its investments (PV of $1. FV of $1. PVA of $1. and FVA of $1) (Use appropriate factor(s) from the tables provided.) Initial...
SHOW ALL YOUR WORKS FOR YOUR CALCULATIONS: Calculate "Initial investment and Expected annual net cash inflow" Playmore Products is considering producing toy action figures and sandbox toys. The products require different specialized machines each costing $1 million. Each machine has a five-year life and zero residual value. The two products have different patterns of predicted net cash inflows. (Click the icon to view the data.) Calculate the toy action figure project's payback period. If the toy action figure project had...
Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value Life of the project Investment Proposal B С D $(430,000) $(50,000) $(50,000) $(1,820,000) 631,600 70,500 76,800 2,429, 200 $ 201,600 $ 20,500 $ 26,800 $ 609,200 5 years 7 years 6 years 6 years Required: 1. Compute the project profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference. Investment Proposal...
2.
Oriental Corporation has gathered the following data on a proposed investment project: Investment in depreciable equipment Annual net cash flows Life of the equipment Salvage value Discount rate $ 450,000 $ 90,000 10 years $ 0 78 The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period for the investment would be: Joetz Corporation has gathered the following data on a proposed investment project (Ignore...
Most questions answered within 3 hours.
-
Given the line notation, identify the anodic and
cathodic reactions and overall reaction:
Ag(s)| AgCl(s) |...
asked 12 minutes ago -
The money raised and spent (both in millions of dollars) by
all congressional campaigns for 8...
asked 15 minutes ago -
Annual salaries for employees in a large company are
approximately normally distributed with a mean of...
asked 24 minutes ago -
1. Lifetimes of a certain brand of lightbulbs is known to follow
a right-skewed distribution with...
asked 24 minutes ago -
The gravitational field
F(x,y,z) =cx /(x2 + y2 + z2)3/2 e1+ cy /(x2 + y2 +...
asked 22 minutes ago -
Below is an abstract from the following paper published in
Frontiers in Cell and Developmental Biology....
asked 25 minutes ago -
Company A is assigned $200,000 of goodwill arising from a recent
business combination. The current carrying...
asked 31 minutes ago -
Write any individual Class A IP address below. It cannot be
non-routable address. Include the subnet...
asked 32 minutes ago -
Coronado Industries had January 1 inventory of $301000 when it
adopted dollar-value LIFO. During the year,...
asked 42 minutes ago -
The cable supporting a 2145-kg elevator has a maximum strength
of 2.18×104 N.
a) What maximum...
asked 51 minutes ago -
Find the critical value(s) and rejection region(s) for a
two-tailed chi-square test with a sample size...
asked 55 minutes ago -
One of your experts gave me an answer of $7.36 but there are
many different answers...
asked 1 hour ago