Question

In: Finance

Given the following information and assuming a 20% CCA class, what is the NPV for this...

Given the following information and assuming a 20% CCA class, what is the NPV for this project? Initial investment in fixed assets = $800,000; initial investment in net working capital = $200,000; life = four years; after-tax cost savings = $250,000 per year; salvage value = $30,000; tax rate = 35%; discount rate = 16%

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Given the following information and assuming a 20% CCA class, what is the NPV for this...
Given the following information and assuming a 20% CCA class, what is the NPV for this project? Initial investment in fixed assets = $800,000; initial investment in net working capital = $200,000; life = four years; after-tax cost savings = $250,000 per year; salvage value = $30,000; tax rate = 35%; discount rate = 16%.
A company is purchasing a new equipment in Class 8 (20% CCA rate -- declining balance...
A company is purchasing a new equipment in Class 8 (20% CCA rate -- declining balance class, half year rule applicable) in 2019 for $33,000. The machine is expected to result in annual revenue of $16,000 for each of the next five years and will be sold at the end of that time for an expected salvage value of $13,000. Maintenance expenses are expected to be $1,400 for the first year and to increase by $200 per year for each...
Given the following information, estimate the cash flows of this project and then compute the NPV...
Given the following information, estimate the cash flows of this project and then compute the NPV of this project. Estimated Sales: 50,000 units per year for each of the next 3 years Estimate Sale Price: $1,050 per unit Variable Cost: $1,000 per unit Fixed Costs: $1,500,000 per year Initial Investment in Plant and Machinery: $1,500,000 to be depreciated to a salvage value of $0 over the next three years. We sell the machine at $45000 in the market at the...
Question 6 You purchase a machine for $200,000 which belongs in a 30% CCA class. What...
Question 6 You purchase a machine for $200,000 which belongs in a 30% CCA class. What is the present value of the CCA tax shield on the machine if it is sold at the end of the fifth year for $24,000, your tax rate is 34%, and the appropriate discount rate is 10%? Select one or more: a. $66,623 b. $40,143 c. $86,994 d. $45,227 e. $46,202 Question 7 A financial lease is usually a shorter-term lease in which the...
5. Find the WACC for Watson Power Co. given the following information and assuming a tax...
5. Find the WACC for Watson Power Co. given the following information and assuming a tax rate of 35%. a. Debt: 10,000 bonds outstanding paying a 6.4% semi-annual coupon; $1,000 par value; 25 years remaining until maturity; the bonds are selling for 108% of par b. Common: 495,000 shares outstanding selling for $63/share; beta = 1.15 c. Preferred: 35,000 shares paying a preferred dividend of $3.50/share and currently selling for $72/share d. Market: 7% market risk premium; risk free rate...
You are given information on the following alternative cash flow streams. Assuming an interest rate of...
You are given information on the following alternative cash flow streams. Assuming an interest rate of 8% p.a. which alternative cash flow stream has the lowest future value at the end of year 7? Group of answer choices $20,000 per year, at the end of each year, for the next 7 years. $50,000 at the end of year 1 and $70,000 at the end of year 2. $100,000 today. $160,000 at the end of year 5.
The cost of an equipment is $300,000 and falls in asset Class 9 for CCA deprecation...
The cost of an equipment is $300,000 and falls in asset Class 9 for CCA deprecation purpose. The depreciation rate of Class 9 assets is 25%. You intend to sell the equipment in 5 years for a salvage value of $40,000. At the time of sale, you still anticipate having other assets in the give asset class. Your tax rate is 35% and your discount rate is 14%. What is the present values of CCA tax shield?
International Economics class problem: What do the hedging alternatives look like given the following information for...
International Economics class problem: What do the hedging alternatives look like given the following information for a 90-day, 1,000,000 account payable? Spot rate: 0.9 to 1 domestic to foreign 90-day forward rate: 0.85 to 1 domestic to foreign Money market periodic: 0.1% OTC Option with strike price of 0.85 to 1 at a cost of 0.5%
Problem 4 (20 pt.) Given the following dataset: ? ? ? Class 2.5 1.5 3.5 -...
Problem 4 (20 pt.) Given the following dataset: ? ? ? Class 2.5 1.5 3.5 - 0.5 1.0 1.5 + 0.5 0.5 1.0 + 2.0 2.5 2.5 + 1.0 2.0 3.0 - 2.0 3.0 1.5 - Supposethatyouwanttoclassifyanobservation?=(?.?, ?.?, ?.?)using?-NearestNeighbors with Euclidean distance as the proximity metric. Answer the following questions: (8 pts.) What is the distance between ? and every observation in the dataset? (3 pts.) What is the predicted class label for ? if ? = ?? (3 pts.)...
Given the following information regarding an income producing property, determine the NPV using levered cash flows...
Given the following information regarding an income producing property, determine the NPV using levered cash flows in your analysis: required equity investment: $270,000; expected NOI for each of the next five years: $150,000; debt service for each of the next five years: $125,000; expected holding period: five years; required yield on levered cash flows: 15%; expected sale price at end of year 5: $2,000,000; expected cost of sale: $125,000; expected mortgage balance at time of sale: $1,500,000.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT