Question

In: Finance

What is the net present value of Project X if it has the following after tax...

What is the net present value of Project X if it has the following after tax cash flows? The interest rate is 6%

             End of year 1 = ($300)        End of year 2 = $500 End of year 3 = $900

Please show equation that is easy to understand, able to put into TI-84.

Solutions

Expert Solution

Year Cash flow PVF @6% PV(CF*PVF)
1                (300.00)               0.9434          (283.0200)
2                  500.00               0.8900             445.0000
3                  900.00               0.8396             755.6400
NPV             917.6200

Note : PVF @R % = 1/(1+R)^n where "n" is number of year and "R" is Discounting rate


Related Solutions

What is the net present value of a capital investment project that has the following, after-tax...
What is the net present value of a capital investment project that has the following, after-tax cash flows for a company that requires a 14% rate of return on the project? Time- 0 1 2 3 Cash Flow- 3,800 500 1,700 7,200
what is the net present value of a project with the following after tax cash flows...
what is the net present value of a project with the following after tax cash flows using a discount rate of 10% year 0 45,000 year 1 14,000 year 2 14,000 year 3 10,000 year 4 10,000 year 5 8,000 would you accept the project? ehat is payback period? what is the profitbility index?
Determine the net present value for a project that costs $229,000 and would yield after-tax cash...
Determine the net present value for a project that costs $229,000 and would yield after-tax cash flows of $21,000 per year for the first 14 years, $29,000 per year for the next 18 years, and $42,000 per year for the following 12 years. Your firm's cost of capital is 10.00%. Question 16 options: $2,488.65 $1,345.00 $1,588.16 $1,885.34 $2,714.89
33. Determine the net present value for a project that costs $286,000 and would yield after-tax...
33. Determine the net present value for a project that costs $286,000 and would yield after-tax cash flows of $21,000 per year for the first 13 years, $29,000 per year for the next 12 years, and $42,000 per year for the following 12 years. Your firm's cost of capital is 8.00%.
1. a) What is the net present value of a project that has upfront costs of...
1. a) What is the net present value of a project that has upfront costs of $5 million and pays end of the year cash flows of $1 million in one year, $2 million in two years, and $3 million in three years if the annual discount rate for the project is 3 percent? Show how much money you would have at the end of three years if you bought the project and what you would have instead if you...
What is the net present value of a project that has an initial cash outflow of...
What is the net present value of a project that has an initial cash outflow of $-13,000, at time 0, and the following cash flows for years 1-4? The required return is 10.0%. DO NOT USE DOLLAR SIGNS OR COMMAS IN YOUR ANSWER. ENTER YOUR ANSWER TO THE NEAREST DOLLAR (e.g. 1250). Year Cash Flows 1 $3,950 2 $3,750 3 $5,900 4 $6,400
Find the present value of the depreciation tax shield and the present value of the after-tax salvage value
 Find the present value of the depreciation tax shield and the present value of the after-tax salvage value, if the annual depreciation is $6,000 for 5 years, the after-tax salvage value is $9,000, and the tax rate is 40%. The required rate of return is 10%. The lease lasts for 5 years. Present value of depreciation tax shield = $9,098 Present value of after-tax salvage value = $34,117 Present value of depreciation tax shield = $22,744 Present value of after-tax salvage value...
If a project has a positive net present value, which of the following must be true?...
If a project has a positive net present value, which of the following must be true? a) the internal rate of return is less than the cost of capital b) the profitability index is less than one c) the profitability index is greater than one d) the internal rate of return equals the cost of capital
A project has the following total (or net) after-tax cash flows.                ____________________________________________________         Year&nbs
A project has the following total (or net) after-tax cash flows.                ____________________________________________________         Year             Total (or net) after-tax cash flow                ____________________________________________________                   1 $1,000,000 2 1,500,000 3 2,000,000 4 2,500,000                   _______________________________________________________ The required rate of return on the project is 15 percent. The initial investment (or initial cost or initial outlay) of the project is $4,000,000. a) Find the (regular) payback period of the project. b) Compute the discounted payback period of the project. c) Find...
Develop a spreadsheet to determine the net present value or present worth of the following project:...
Develop a spreadsheet to determine the net present value or present worth of the following project: Bonus Depreciation: 0% Investment: 140,000 Revenue/Savings: 25,000 Incremental Expense/Cost: 5,000 Salvage Value: 25,000 Project Life: 10 years MACRS Schedule: 7 years Tax Rate: 25% MARR: 12% Inflation: 3% Is this a good investment to make? Rework the problem with Bonus Depreciation of 50% and 100% Determine the internal rate of return for the project in the previous problem with all three levels of Bonus...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT