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In: Finance
A new machine will cost $220,000 and generate after-tax cash inflows of $30,000 for 10 years....
A new machine will cost $220,000 and generate after-tax cash inflows of $30,000 for 10 years. Find the NPV if the firm uses a 10% opportunity cost of capital. What is the IRR? What is the payback period?
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jeff jeffy answered 2 years agoRelated Solutions
A new machine will cost $220,000 and generate after-tax cash inflows of $30,000 for 10 years....
A new machine will cost $220,000 and generate after-tax cash
inflows of $30,000 for 10 years. Find the NPV if the firm uses a
10% opportunity cost of capital. What is the IRR? What is the
payback period? (no Excel)
A new machine will cost $100,000 today and generate cash inflows of $35,000 each year for...
A new machine will cost $100,000 today and generate cash inflows
of $35,000 each year for 4 years. (a) If the firm has a 10% cost of
capital, should the firm buy this machine under NPV rule? (Please
calculate the NPV of this investment and explain your reason) (b)
How high can the discount rate be before you would reject buying
this machine? (Please explain the reason. Your answer should have
at least one decimal digit)
A new machine will provide the following net annual cash inflows. If the cost of the...
A new machine will provide the following net annual cash
inflows. If the cost of the machine is $12,000, what is the payback
period? What is the discounted payback period if the discount rate
is 10%?
Year Cash Inflow
1 $ 1,345
2. 2,605
3 4,509
4 5,219
5 4,481
6 3,823
7 3,500
1 A project has an initial cost of $ 320,000, expected after-tax cash inflows of $...
1 A project has an initial cost of $ 320,000, expected after-tax
cash inflows of $ 75,000 per year for 8 years, a net salvage value
of $ 30,000, and a cost of capital of 11%.
a) What is the project's net present value?
b) What is the project's profitability index? c) What is the
project's internal rate of return?
d) What is the project's modified internal rate of return
(assume the investment rate to be equal to the cost...
LM Company is considering investing in a new project that will generate cash inflows of $45,000...
LM Company is considering investing in a new project that will generate cash
inflows of $45,000 every year for the ten-year life of the project. Investing
in this new project will require the purchase of a new machine, which will cost
$200,000. The machine will have a salvage value of $15,000 at the end of ten
years, but will require a repair costing $6,000 at the end of year four and a
repair costing $10,000 at the end of year...
LM Company is considering investing in a new project that will generate cash inflows of $45,000...
LM Company is considering investing in a new project that will
generate cash inflows of $45,000 every year for the ten-year life
of the project. Investing in this new project will require the
purchase of a new machine, which will cost $200,000. The machine
will have a salvage value of $15,000 at the end of ten years, but
will require a repair costing $6,000 at the end of year four and a
repair costing $10,000 at the end of year...
A project is projected to cost $2,000,000 to undertake. It will generate positive cash inflows as follows: Year...
A project is projected to cost $2,000,000 to
undertake. It will generate positive cash inflows as
follows: Year 1 - $400,000; Year 2 – 500,000; Year 3 -
$650,000; Year 4 – 750,000; Year 5 – 800,000. What is
the project’s discounted payback, given a 10% required rate of
return?
Select one:
a. 4.45 years
b. 4.82 years
c. 4.92 years
d. 5.0 years
e. Discounted payback does not occur
A project is projected to cost $2,000,000 to undertake. It will generate positive cash inflows as follows: Year...
A project is projected to cost $2,000,000 to
undertake. It will generate positive cash inflows as
follows: Year 1 - $400,000; Year 2 – 500,000; Year 3 -
$650,000; Year 4 – 750,000; Year 5 – 800,000. What is
the project’s Profitability Index?
Select one:
a. 1.22
b. 1.20
c. 1.16
d. 1.14
e. 1.12
Wheeling-Pittsburgh Steel Company installed a new machine at a cost of $285000. The expected salvage value of this machine was $50000 after 10 years. During this 10 years, the annual revenue was $52000.
Wheeling-Pittsburgh Steel Company installed a new machine at a cost of $285000. The expected salvage value of this machine was $50000 after 10 years. During this 10 years, the annual revenue was $52000.Did the company recover the investment at 12% per year return?If the annual operating cost was $10000 the first year and increased constantly by $1000 per year, estimate if the AW was negative or positive at interest of 12% per year? Assume the salvage value of the machine...
A grader has an initial cost of $220,000 and an estimated useful life of 10 years....
A grader has an initial cost of $220,000 and an estimated useful
life of 10 years. The salvage value after 10 years of use is
estimated to be $25,000. What is the annual depreciation amount in
the fourth year if the sum-of-the-years method of depreciation
accounting is used?
Select one:
a. $19,500.00
b. $24,818.18
c. $28,363.64
d. $99,454.55
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