You are considering starting an air delivery business. Your will need to spend $95,000 today to...
You are considering starting an air delivery business. Your will need to spend $95,000 today to purchase the airplane and other necessary equipment. You expect to generate cash flows (after expenses) of $17,000 per year for the first five years and then $11,000 per year for the next 5 years. At the end of 10 years, you think you can sell the business for about $96,000. If your required return is 11%, what is the NPV of this project? Answer to the nearest dollar, for example 1000.
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You are considering starting an air delivery business. Your will
need to spend $95,000 today to...
You are considering starting an air delivery business. Your will need to spend $117,000 today to...
You are considering starting an air delivery business. Your will need to spend $117,000 today to purchase the airplane and other necessary equipment. You expect to generate cash flows (after expenses) of $17,000 per year for the first five years and then $10,000 per year for the next 5 years. At the end of 10 years, you think you can sell the business for about $102,000. If your required return is 14%, what is the NPV of this project?
You and your business partners are considering applying for a franchise. If approved, you expect startup...
You and your business partners are considering applying for a franchise. If approved, you expect startup costs to be $400,000 plus $300,000 in real estate costs. Of this $700,000 in upfront costs, you will be allowed to depreciate $420,000 on a five-year MACRS schedule. The remaining $280,000 is not depreciable but should be included in the book value of the fixed assets associated with the franchise when it is sold. Your plan is to start and operate the business for...
You are planning to acquire a business today and sell it in 3 years. The cash...
You are planning to acquire a business today and sell it in 3 years. The cash flows associated with this investment are: 219,496 an expense of dollars in year zero; an expense of 36,201 dollars in year 1; a receivable of 27,681 dollars in year 2; a receivable of 38,789 dollars in year 3. In addition, you expect to sell the business for 364,064 dollars upon the last receivable. If the MARR (Minimum Acceptable Rate of Return) is 5% per...
You are planning to acquire a business today and sell it in 3 years. The cash...
You are planning to acquire a business today and sell it in 3 years. The cash flows associated with this investment are: 252944 an expense of dollars in year zero; an expense of 46038 dollars in year 1; a receivable of 20341 dollars in year 2; a receivable of 32544 dollars in year 3. In addition, you expect to sell the business for 320333 dollars upon the last receivable. If the MARR (Minimum Acceptable Rate of Return) is 4% per...
You are considering buying a delivery van for your company. It will cost $35,000 right now...
You are considering buying a delivery van for your company. It will cost $35,000 right now (Year 0), and you estimate that with the van, your profits will be $7,500 per year for Years 1 through 10. At the end of Year 10, you think you can sell the van for $1,000. Assume a MARR of 18%. a. What is the present worth of the van? b. Is this investment worth considering? a. What is the present worth of this...
Your company has the opportunity to enter a business that will generate cash-flows of 60,000€ per...
Your company has the opportunity to enter a business that will generate cash-flows of 60,000€ per year, starting next year, and during 15 years. Calculate how much you should invest today if you want to get a profitability of 6%
1) One year ago, you paid $15,000 for an empty plot of land. Today, you are...
1) One year ago, you paid $15,000 for an empty plot of land. Today, you are considering developing it into a parking lot. It will cost you $50,000 today to turn this land into a parking lot. As a parking lot, you anticipate that it will generate $8,000 in revenue each year forever, starting one year from today. The required return for this project is 14% annually. Assume that you have no other ideas for what to do with this...
6You are a 50/50 partner in a BBQ restaurant. Your business partner, who majored in English...
6You are a 50/50 partner in a BBQ restaurant. Your business partner, who majored in English Literature, wants to invest in a new, larger, more efficient smoker. Including delivery, the new smoker costs $19,000 (paid today, year 0). According to your partner's calculations, the new smoker would generate annual cash savings, including labor, raw materials, and tax savings due to depreciation of $6,000/year for the next 5 years (starting in year 1). In his words, "This new BBQ smoker will...
You are starting your own e-commerce business. You decide to form a company that will sell...
You are starting your own e-commerce business. You decide to form a company that will sell comics books online. You estimate that the annual cost of this business will be as follows: Table 1 Technology (Web design and maintenance) $5,000 Postage and handling $1,000 Miscellaneous $3,000 Shipping supply $2,000 Equipment $4,000 Overhead $3,000 You can buy each book for $20 and you plan to sell each book for $30. You expect to sell about 1,200 books per month online. Assume...
Your firm is considering an investment that will cost $920,000 today.
Your firm is considering an investment that will cost $920,000 today. The investment will produce cash flows of $450,000 in year 1. $270.000 in years 2, 3 and 4 and 200.000 in years. The discount rate that your firm uses for projects of this type is 10% How much would the NPV change if discount rate increases to 8%?
You are considering starting an air delivery business. Your will need to spend $117,000 today to purchase the airplane and other necessary equipment. You expect to generate cash flows (after expenses) of $17,000 per year for the first five years and then $10,000 per year for the next 5 years. At the end of 10 years, you think you can sell the business for about $102,000. If your required return is 14%, what is the NPV of this project?
Your company has the opportunity to enter a business that will generate cash-flows of 60,000€ per year, starting next year, and during 15 years. Calculate how much you should invest today if you want to get a profitability of 6%
6You are a 50/50 partner in a BBQ restaurant. Your business partner, who majored in English Literature, wants to invest in a new, larger, more efficient smoker. Including delivery, the new smoker costs $19,000 (paid today, year 0). According to your partner's calculations, the new smoker would generate annual cash savings, including labor, raw materials, and tax savings due to depreciation of $6,000/year for the next 5 years (starting in year 1). In his words, "This new BBQ smoker will...
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