Assume straight-line depreciation to zero. Initial investment= $20; life= 5 years; pretax sales= $20 per year; Total operating costs= 5; tax rate= 34%; No Salvage Value. Required NWC is $15. What is the NPV of this project, if discount rate is 11%?
calculate the average accounting return. 29.04%
NI= 7.26
AVR assets= 25
AAR= 0.2904
Option E
NPV=-20-15+15/1.11^5+((20-5-20/5)*(1-34%)+20/5)/11%*(1-1/1.11^5)
=15.51757034
The project of G-Depress has the following information about the project: Assume straight-line depreciation to zero....
The project of G-Depress has the following information about the project: Assume straight-line depreciation to zero. Initial investment= $20; life= 5 years; pretax sales= $20 per year; Total operating costs= 5; tax rate= 34%; No Salvage Value. Required NWC is $15. What is the NPV of this project, if discount rate is 11%? $6.5 $8.2 $9.7 $13.7 $15.5 8. Given the numbers in the previous example, calculate the average accounting return. à 29.04% NI= 7.26 AVR assets= 25 AAR=...
The project of G-depress has the following information about the project: Assume straight-line depreciation to zero. Initial investment = $20 life = 5 years; pretax sales = $20 per year; total operating costs = 5, tax rate= 34%; no salvage value. Required NWC is $15. What is the NPV of this project if the discount rate is 11% Given number calculate the net income
1. XYZ is considering a project with the following data: Sales Revenue = $500,000 Pre-tax Cannibalization cost = $50,000 Asset Cost = $450,000 Straight line depreciation over 3 years with zero salvage value Operating costs = $250,000 (does not include depreciation) Tax Rate 21% a. What is the after-tax cash flow? Assume a cost of capital of 10% and that the cash flows are constant for 3 years. What is the NPV? b. What is the NPV if we need...
Consider a three year project with an initial fixed asset investment of $583206, straight-line depreciation to zero over the lifetime of the project and no salvage value. Each item will be sold for a $74 price Variable costs are $20 for each item, and an annual fixed cost of $162680 will be incurred. The current estimate of units sold per year is 31384 units. The company has a tax rate of 40% and the discount rate is 10%. How sensitive...
Consider a four-year project with the following information: initial fixed asset investment = $375,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $56; variable costs = $23; fixed costs = $195,000; quantity sold = 84,000 units; tax rate = 34%. How sensitive is OCF to changes in quantity sold? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) (Do not forget to include + or...
Consider a four-year project with the following information: initial fixed asset investment = $275,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $46; variable costs = $12; fixed costs = $195,000; quantity sold = 84,000 units; tax rate = 34%. How sensitive is OCF to changes in quantity sold? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) (Do not forget to include + or...
Consider a four-year project with the following information: initial fixed asset investment = $575,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $36; variable costs = $17; fixed costs = $175,000; quantity sold = 84,000 units; tax rate = 34%. How sensitive is OCF to changes in quantity sold? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) (Do not forget to include + or...
Consider a four-year project with the following information: initial fixed asset investment = $375,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $56; variable costs = $23; fixed costs = $195,000; quantity sold = 84,000 units; tax rate = 34%. How sensitive is OCF to changes in quantity sold? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) (Do not forget to include + or...
Consider a three year project with an initial fixed asset investment of $418142, straight-line depreciation to zero over the lifetime of the project and no salvage value. Each item will be sold for a $71 price. Variable costs are $21 for each item, and an annual fixed cost of $190809 will be incurred. The current estimate of units sold per year is 37006 units. The company has a tax rate of 32% and the discount rate is 10%. How sensitive...
Consider a project with the following information: Initial fixed asset investment = $495,000; straight-line depreciation to zero over the 4-year life; zero salvage value; price = $43; variable costs = $26; fixed costs = $195,000; quantity sold = 94,000 units; tax rate = 22 percent. How sensitive is OCF to changes in quantity sold?