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In: Finance
first step in calculation of net present value is to find out
first step in calculation of net present value is to find out
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Find Net Present Value.
Franklin Company is considering investing in two new vans that are expected to generate combined cash inflows of $32,000 per year. The vans’ combined purchase price is $99,000. The expected life and salvage value of each are seven years and $20,100, respectively. Franklin has an average cost of capital of 12 percent. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)
Required
Calculate the net present value of the investment opportunity. (Negative amount should be...
Present Value & Future Value calculation
Calculate the required values and select the correct option.
(Net present value calculation) Big Steve's, makers of swizzle sticks, is considering the purchase of a...
(Net present value calculation) Big Steve's, makers of
swizzle sticks, is considering the purchase of a new plastic
stamping machine. This investment requires an initial outlay of
$110,000 and will generate net cash inflows of $17,000 per
year for 8 years.
a. What is the project's NPV using a discount rate of 8
percent? Should the project be accepted? Why or why not?
b. What is the project's NPV using a discount rate of 17
percent? Should the project be...
(Net present value calculation) Big Steve's, makers of swizzle sticks, is considering the purchase of a...
(Net present value calculation) Big Steve's, makers of
swizzle sticks, is considering the purchase of a new plastic
stamping machine. This investment requires an initial outlay of
$105,000 and will generate net cash inflows of $20,000 per year
for 8 years.
a. If the discount rate is 7 percent, then the project's NPV
is $______. (Round to the nearest dollar.) The project should be
accepted because the NPV is (positive/negative)
and therefore (adds/does not add) value to the
firm.
b. ...
(Net present value calculation) Big Steve's, makers of swizzle sticks, is considering the purchase of a...
(Net present value calculation) Big Steve's, makers of swizzle
sticks, is considering the purchase of a new plastic stamping
machine. This investment requires an initial outlay of $105 comma
000 and will generate net cash inflows of $21 comma 000 per year
for 9 years.
a. What is the project's NPV using a discount rate of 7 percent
? Should the project be accepted? Why or why not?
b. What is the project's NPV using a discount rate of 14...
(Net present value calculation) Big Steve's, makers of swizzle sticks, is considering the purchase of a...
(Net present value calculation) Big Steve's, makers of
swizzle sticks, is considering the purchase of a new plastic
stamping machine. This investment requires an initial outlay of
$95,000 and will generate net cash inflows of $21,000 per year
for 9 years. a. What is the project's NPV using a discount rate
of 8 percent? Should the project be accepted? Why or why not?
b. What is the project's NPV using a discount rate of 16
percent? Should the project be...
Net Present Value Method, Present Value Index, and Analysis First United Bank Inc. is evaluating three...
Net Present Value Method, Present Value Index, and Analysis
First United Bank Inc. is evaluating three capital investment
projects using the net present value method. Relevant data related
to the projects are summarized as follows:
Branch
Office
Expansion
Computer
System
Upgrade
ATM
Kiosk
Expansion
Amount to be invested
$601,461
$411,359
$216,033
Annual net cash flows:
Year 1
317,000
219,000
133,000
Year 2
295,000
197,000
92,000
Year 3
269,000
175,000
67,000
Present Value of $1 at Compound
Interest
Year
6%
10%...
Net Present Value
NBA stars Kevin Durant and Chris Paul own a company that faces a 40% tax rate and uses a 14% discount rate. They just invested $677,000 in equipment for the banking app “Goalsetter” that would be depreciated on a straight-line basis to zero over the 6-year life of the project. The equipment will be salvaged for $182,000 at the end of the project. Kevin Durant and Chris Paul know that the project's operating cash flow will be $165,300 per year. What is the NPV of this project if it...
Net present Value
Company A wishes to invest in 4 projects X, W, Y & Z whose net benefits are given in the table below.
Project
Years
0
1
2
3
4
W
(1000)
1200
0
0
0
X
(1361.1)
500
500
500
500
Y
(1000)
1200
1500
0
0
Z
(2000)
1000
0
0
0
Using a discount rate of 10% appraise the 4 projects using the NPV criteria.
Find the net present value of a project with initial cost of $5,876,000 and produces the...
Find the net present value of a project with initial cost of
$5,876,000 and produces the following cash flows: $3,200,000 at the
end of year 1; $2,973,000 at the end of year 2; and $2,525,000 at
the end of year 3. The required rate of return for the project is
15 percent.
A.
$814,852
B.
$1,634,917
C.
$723,100
D.
$487,286
A project costs $4,769,500 initially and produces the following
cash flows: $1,000,000 at the end of year 1; $1,500,000 at...
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