Given the following attributes of an investment project with a five-year life: investment outlay. year 0...
Given the following attributes of an investment project with a five-year life: investment outlay. year 0 $5,000; after-tax cash inflows. year 1, $800; year 2, $900; year 3, $1,500; year 4, $1,800; and year 5 $3,200.
Use the built-in NPV function in Excel to estimate the NPV of this project. Round to the nearest whole dollar. Assume an after-tax discount rate of 12.0%.
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Given the following attributes of an investment project with a
five-year life: investment outlay. year 0...
Given the following attributes of an investment project with a five-year life: investment outlay, year 0,...
Given the following attributes of an investment project with a five-year life: investment outlay, year 0, $8,700; after-tax cash inflows, year 1, $930; year 2, $1,070; year 3, $3,200; year 4, $3,500; and year 5, $4,900. (a) Use the built-in NPV function of Excel to estimate the NPV of this project. Assume an after-tax discount rate of 11.0% (b) Estimate the payback period, in years, for this project under the assumption that cash inflows occur evenly throughout the year. (Round...
Given the following attributes of an investment project with a five-year life: investment outlay. year 0...
Given the following attributes of an investment project with a five-year life: investment outlay. year 0 $5,000; after-tax cash inflows. year 1, $800; year 2, $900; year 3, $1,500; year 4, $1,800; and year 5 $3,200. Estimate the payback period, in years, for this project under the assumption that cash inflows occur evenly throughout the year. round to the 1 decimal place.
14 J. Morgan of SparkPlug Inc. has been approached to take over a production facility from B.R. M...
14 J. Morgan of SparkPlug Inc. has been approached to take over a production facility from B.R. Machine Company. The acquisition will cost $1,900,000, and the after-tax net cash inflow will be $306,000 per year for 12 years. SparkPlug currently uses 9% for its after-tax cost of capital. Tom Morgan, production manager, is very much in favor of the investment. He argues that the total after-tax net cash inflow is more than the cost of the investment, even if the...
14 J. Morgan of SparkPlug Inc. has been approached to take over a production facility from...
14 J. Morgan of SparkPlug Inc. has been approached to take over a production facility from B.R. Machine Company. The acquisition will cost $1,900,000, and the after-tax net cash inflow will be $306,000 per year for 12 years. SparkPlug currently uses 9% for its after-tax cost of capital. Tom Morgan, production manager, is very much in favor of the investment. He argues that the total after-tax net cash inflow is more than the cost of the investment, even if the...
A potential investment requires an initial cash outlay of $660,000 and has a useful life of...
A potential investment requires an initial cash outlay of $660,000 and has a useful life of 11 years. Annual cash receipts from the investment are expected to be $220,000. The salvage value of the Investment is expected to be $70,000. The company's tax rate is 35%. The entire initial cash outlay (without any reduction for salvage value) will be depreciated over 11 years. Assume a discount rate of 19% Show your Excel input and calculated net present value after-tax. (If...
Answer each independent question, (a) through (e), below. a. Project A costs $5,000 and will generate...
Answer each independent question, (a) through (e), below. a. Project A costs $5,000 and will generate annual after-tax net cash inflows of $1,800 for 5 years. What is the payback period for this investment under the assumption that the cash inflows occur evenly throughout the year? (Round your answer to 2 decimal places.) b. Project B costs $5,000 and will generate after-tax cash inflows of $500 in year 1; $1,200 in year 2; $2,000 in year 3, $2,500 in year...
Che Answer each independent question, (a) through (e), below. a. Project A costs $5,000 and will...
Che Answer each independent question, (a) through (e), below. a. Project A costs $5,000 and will generate annual after-tax net cash inflows of $1,800 for 5 years. What is the payback period for this investment under the assumption that the cash inflows occur evenly throughout the year? (Round your answer to 2 decimal places.) b. Project B costs $5,000 and will generate after-tax cash inflows of $500 in year 1: $1,200 in year 2, $2,000 in year 3; $2,500 in...
Project A costs $5,400 and will generate annual after-tax net cash inflows of $1,800 for five years. What is the NPV usi...
Project A costs $5,400 and will generate annual after-tax net cash inflows of $1,800 for five years. What is the NPV using 5% as the discount rate? Round your present value factor to three decimal places and final answer to the nearest dollar.
Cardinal Company is considering a five-year project that would require a $2,915,000 investment in equipment with a useful life of five years and no salvage value.
Cardinal Company is considering a five-year project that would require a $2,915,000 investment in equipment with a useful life of five years and no salvage value. The company’s discount rate is 16%. The project would provide net operating income in each of five years as follows: Sales$2,863,000 Variable expenses1,014,000 Contribution margin1,849,000 Fixed expenses: Advertising, salaries, and other out-of-pocket costs$781,000 Depreciation583,000 Total fixed expenses1,364,000 Net operating income$485,000 (Hint: Use Microsoft Excel to calculate the discount factor(s).) Respond with workings:2-a. What are the project’s annual net cash inflows?2-b. What is the present...
J. Morgan of SparkPlug Inc. has been approached to take over a production facility from B.R....
J. Morgan of SparkPlug Inc. has been approached to take over a production facility from B.R. Machine Company. The acquisition will cost $1,960,000, and the after-tax net cash inflow will be $330,000 per year for 12 years. SparkPlug currently uses 10% for its after-tax cost of capital. Tom Morgan, production manager, is very much in favor of the investment. He argues that the total after-tax net cash inflow is more than the cost of the investment, even if the demand...
Given the following attributes of an investment project with a five-year life: investment outlay, year 0, $8,700; after-tax cash inflows, year 1, $930; year 2, $1,070; year 3, $3,200; year 4, $3,500; and year 5, $4,900. (a) Use the built-in NPV function of Excel to estimate the NPV of this project. Assume an after-tax discount rate of 11.0% (b) Estimate the payback period, in years, for this project under the assumption that cash inflows occur evenly throughout the year. (Round...
14 J. Morgan of SparkPlug Inc. has been approached to take over a production facility from B.R. Machine Company. The acquisition will cost $1,900,000, and the after-tax net cash inflow will be $306,000 per year for 12 years. SparkPlug currently uses 9% for its after-tax cost of capital. Tom Morgan, production manager, is very much in favor of the investment. He argues that the total after-tax net cash inflow is more than the cost of the investment, even if the...
14 J. Morgan of SparkPlug Inc. has been approached to take over a production facility from B.R. Machine Company. The acquisition will cost $1,900,000, and the after-tax net cash inflow will be $306,000 per year for 12 years. SparkPlug currently uses 9% for its after-tax cost of capital. Tom Morgan, production manager, is very much in favor of the investment. He argues that the total after-tax net cash inflow is more than the cost of the investment, even if the...
A potential investment requires an initial cash outlay of $660,000 and has a useful life of 11 years. Annual cash receipts from the investment are expected to be $220,000. The salvage value of the Investment is expected to be $70,000. The company's tax rate is 35%. The entire initial cash outlay (without any reduction for salvage value) will be depreciated over 11 years. Assume a discount rate of 19% Show your Excel input and calculated net present value after-tax. (If...
Answer each independent question, (a) through (e), below. a. Project A costs $5,000 and will generate annual after-tax net cash inflows of $1,800 for 5 years. What is the payback period for this investment under the assumption that the cash inflows occur evenly throughout the year? (Round your answer to 2 decimal places.) b. Project B costs $5,000 and will generate after-tax cash inflows of $500 in year 1; $1,200 in year 2; $2,000 in year 3, $2,500 in year...
Che Answer each independent question, (a) through (e), below. a. Project A costs $5,000 and will generate annual after-tax net cash inflows of $1,800 for 5 years. What is the payback period for this investment under the assumption that the cash inflows occur evenly throughout the year? (Round your answer to 2 decimal places.) b. Project B costs $5,000 and will generate after-tax cash inflows of $500 in year 1: $1,200 in year 2, $2,000 in year 3; $2,500 in...
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