first step in calculation of net present value is to find out

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jeff jeffy answered 1 year ago

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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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