A project has an initial requirement of $230,294 for new equipment and $10,145 for net working...

A project has an initial requirement of $230,294 for new equipment and $10,145 for net working capital. The installation costs to get the new equipment in working condition are 5,997. The fixed assets will be depreciated to a zero book value over the 5-year life of the project and have an estimated salvage value of $116,602. All of the net working capital will be recouped at the end of the project. The annual operating cash flow is $118,381 and the cost of capital is 14% What is the project's NPV if the tax rate is 37%?

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

A project has an initial requirement of $191013 for new equipment and $13286 for net working...

A project has an initial requirement of $191013 for new equipment and $13286 for net working capital. The installation costs to get the new equipment in working condition are 3728. The fixed assets will be depreciated to a zero book value over the 5-year life of the project and have an estimated salvage value of $72103. All of the net working capital will be recouped at the end of the project. The annual operating cash flow is $94903 and the...

A project has an initial requirement of $205,268 for new equipment and $14,020 for net working...

A project has an initial requirement of $205,268 for new equipment and $14,020 for net working capital. The installation costs to get the new equipment in working condition are 14,481. The fixed assets will be depreciated to a zero book value over the 5-year life of the project and have an estimated salvage value of $77,779. All of the net working capital will be recouped at the end of the project. The annual operating cash flow is $80,130 and the...

A project has an initial requirement of $176,772 for new equipment and $11,134 for net working...

A project has an initial requirement of $176,772 for new equipment and $11,134 for net working capital. The installation costs are expected to be $14,442. The fixed assets will be depreciated to a zero book value over the 4-year life of the project and have an estimated salvage value of $123,456. All of the net working capital will be recouped at the end of the project. The annual operating cash flow is $88,581 and the cost of capital is 10%...

A project has an initial requirement of $219,312 for new equipment and $14,180 for net working...

A project has an initial requirement of $219,312 for new equipment and $14,180 for net working capital. The installation costs are expected to be $13,506. The fixed assets will be depreciated to a zero book value over the 4-year life of the project and have an estimated salvage value of $94,642. All of the net working capital will be recouped at the end of the project. The annual operating cash flow is $51,197 and the cost of capital is 5%...

A 5-yr project has an initial requirement of $114,625 for new equipment and $9,960 for net...

A 5-yr project has an initial requirement of $114,625 for new equipment and $9,960 for net working capital. The fixed assets will be depreciated to a zero book value over 5 years and have an estimated salvage value of $24,773. All of the net working capital will be recouped at the end of the project. The annual operating cash flow is $58,012. The cost of capital is 9% and the tax rate is 32%. What is the net present value...

A project has an initial requirement of $89,218 for equipment. The equipment will be depreciated to...

A project has an initial requirement of $89,218 for equipment. The equipment will be depreciated to a zero book value over the 5-year life of the project. The investment in net working capital will be $21,134. All of the net working capital will be recouped at the end of the 5 years. The equipment will have an estimated salvage value of $13,654. The annual operating cash flow is $39,203. The cost of capital is 12 percent. What is the project’s...

A project has an initial requirement of $62532 for equipment. The equipment will be depreciated to...

A project has an initial requirement of $62532 for equipment. The equipment will be depreciated to a zero book value over the 5-year life of the project. The investment in net working capital will be $24926. All of the net working capital will be recouped at the end of the 5 years. The equipment will have an estimated salvage value of $13096. The annual operating cash flow is $56978. The cost of capital is 14 percent. What is the project’s...

1 . A 5-yr project has an initial requirement of $147,019 for new equipment and $9,851...

1 . A 5-yr project has an initial requirement of $147,019 for new equipment and $9,851 for net working capital. The fixed assets will be depreciated to a zero book value over 5 years and have an estimated salvage value of $22,221. All of the net working capital will be recouped at the end of the project. The annual operating cash flow is $66,029. The cost of capital is 11% and the tax rate is 34%. What is the net...

A 5-year project has an initial fixed asset investment of $522,600, an initial net working capital...

A 5-year project has an initial fixed asset investment of $522,600, an initial net working capital investment of $13,200, and an annual operating cash flow of -$51,480. The fixed asset is fully depreciated over the life of the project and has no salvage value. The net working capital will be recovered when the project ends. The required return is 15.8 percent. What is the project's equivalent annual cost, or EAC?

Part A A new project has an initial cost of $142,000. The equipment will be depreciated...

Part A A new project has an initial cost of $142,000. The equipment will be depreciated on a straight-line basis to a book value of $45,000 at the end of the four-year life of the project. The projected net income each year is $14,300, $17,600, $22,400, and $14,200, respectively. What is the average accounting return? Part B You are evaluating two projects with the following cash flows: Year Project X Project Y 0 −$540,600 −$511,000 1 219,700 209,400 2 229,600...

Subjects