Question
In: Finance
A Six Sigma project needs initial investment of $20,000 at July 2003, which includes training fee,...
- A Six Sigma project needs initial investment of $20,000 at July 2003, which includes training fee, consulting fee and other expenses. The costs and benefits of this project is listed in the following table:
|
Time |
July 1 2003 |
Oct 1 2003 |
Jan 1 2004 |
Apr 1 2004 |
July 1 2004 |
Oct. 1 2004 |
Jan 1 2005 |
Apr 1 2005 |
July 1 2005 |
|
Cost |
$20k |
4.5k |
1.5k |
1.5k |
0 |
0 |
0 |
0 |
0 |
|
Benefit |
0 |
3.5k |
5.5k |
4.5k |
4.5k |
4.5k |
4.5k |
4.5k |
4.5k |
If the capital cost within company is i=10% per year.
- By using NPV, is this project worthwhile?
- What is the project’s IRR?
- What is this project’s payback period (in month)?
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Solutions
jeff jeffy answered 1 year agoRelated Solutions
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caclulate the NPV for the project that has an initial investment
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per year for each of the next 3 years. However, in preparation for
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$350,000 must be made at the end of Year 2. What is the NPV? the
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excel!
Calculate the rate of return for an investment with the following characteristics. Initial cost $20,000 Project...
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Initial cost
$20,000
Project life
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Annual receipts
$6000
Annual disbursements
$3000
Consider the following two investment projects: Project A: it has an initial cost of 20,000 euros...
Consider the following two investment projects:
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additional investments of 5,000 euros at the end of the first year
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Project B: it has an initial cost of 20,000 euros and requires
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A project requires an initial investment of $350,000 and will return $140,000 each year for six...
A project requires an initial investment of $350,000 and will
return $140,000 each year for six years.
Factors: Present Value of $1
Factors: Present Value of an Annuity
(r = 10%)
(r = 10%)
Year 0
1.0000
Year 1
0.9091
Year 1
0.9091
Year 2
0.8264
Year 2
1.7355
Year 3
0.7513
Year 3
2.4869
Year 4
0.6830
Year 4
3.1699
Year 5
0.6209
Year 5
3.7908
Year 6
0.5645
Year 6
4.3553
If taxes are ignored and the required...
A project requires an initial investment of $350,000 and will return $140,000 each year for six...
A project requires an initial investment of $350,000 and will
return $140,000 each year for six years.
Factors: Present Value of $1
Factors: Present Value of an Annuity
(r = 10%)
(r = 10%)
Year 0
1.0000
Year 1
0.9091
Year 1
0.9091
Year 2
0.8264
Year 2
1.7355
Year 3
0.7513
Year 3
2.4869
Year 4
0.6830
Year 4
3.1699
Year 5
0.6209
Year 5
3.7908
Year 6
0.5645
Year 6
4.3553
If taxes are ignored and the required...
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$400,000, which includes an increase in net working capital of
$16,000. The project has a life of 12 years with an expected
salvage value of $3,000. The project will be depreciated via
simplified straight-line depreciation. Revenues are expected to
increase by $90,000 per year and operating expenses by $8,000 per
year. The firm's marginal tax rate is 40 percent and the cost of
capital for this project is 15%....
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