Question

In: Finance

A project is being considered for upgrading inventory storage facility where the cost of the project...

A project is being considered for upgrading inventory storage facility where the cost of the project would be $120,000.00. This four-year long project is expected to generate future cash flow of $45,000.00 in each year. Considering the risk associated with the project, the required rate of return should be 12%. Find

  1. Net Present Value =
  2. Internal Rate of Return =
  3. Present Value Index =
  4. Payback Period =
  5. Discounted Payback Period =

Solutions

Expert Solution



Related Solutions

A project with an up-front cost at t = 0 of $1500 is being considered by...
A project with an up-front cost at t = 0 of $1500 is being considered by Nationwide Pharmaceutical Corporation (NPC). (All dollars in this problem are in thousands.) The project's subsequent cash flows are critically dependent on whether a competitor's product is approved by the Food and Drug Administration. If the FDA rejects the competitive product, NPC's product will have high sales and cash flows, but if the competitive product is approved, that will negatively impact NPC. There is a...
A project with an up-front cost at t = 0 of $1500 is being considered by...
A project with an up-front cost at t = 0 of $1500 is being considered by Nationwide Pharmaceutical Corporation (NPC). (All dollars in this problem are in thousands.) The project's subsequent cash flows are critically dependent on whether a competitor's product is approved by the Food and Drug Administration. If the FDA rejects the competitive product, NPC's product will have high sales and cash flows, but if the competitive product is approved, that will negatively impact NPC. There is a...
1. A project with an up-front cost at t=0 of $1500 is being considered by Nationwide...
1. A project with an up-front cost at t=0 of $1500 is being considered by Nationwide Pharmaceutical Corporation (NPC). (All dollars in this problem are in thousands.) The project’s subsequent cash flows are critically dependent on whether a competitor’s product is approved by the Food and Drug Administration. If the FDA rejects the competitive product, NPC’s product will have high sales and cash flows, but if the competitive product is approved, that will negatively impact NPC. There is a 75%...
A project with an up-front cost at t=0 of $1500 is being considered by Nationwide Pharmaceutical...
A project with an up-front cost at t=0 of $1500 is being considered by Nationwide Pharmaceutical Corporation (NPC). (All dollars in this problem are in thousands.) The project’s subsequent cash flows are critically dependent on whether a competitor’s product that is now under development is approved by the Food and Drug Administration. If the FDA rejects the competitive product upon the completion of its development, NPC’s product will have high sales and cash flows, but if the competitive product is...
An expansion project being considered by your firm has an initial cost of $8,000,000 and expected...
An expansion project being considered by your firm has an initial cost of $8,000,000 and expected net cash flows of $1,500,000 per year for the first 2 years, 1,800,000 for the third and fourth years, and $1,900,000 per year for the fifth and sixth years. All cash flows will occur at the end of each year. Assume that the project will be terminated at the end of the sixth year. Your firm’s cost of capital is 11%. Calculate the Net...
3. A project with an up-front cost at t=0 of $1500 is being considered by Nationwide...
3. A project with an up-front cost at t=0 of $1500 is being considered by Nationwide PharmaceuticalCorporation (NPC). (All dollars in this problem are in thousands.) The project’s subsequent cash flows arecritically dependent on whether a competitor’s product that is now under development is approved by the Food and Drug Administration. If the FDA rejects the competitive product upon the completion of its development, NPC’s product will have high sales and cash flows, but if the competitive product is approved,...
2. A project with an up-front cost at t=0 of $1500 is being considered by Nationwide...
2. A project with an up-front cost at t=0 of $1500 is being considered by Nationwide Pharmaceutical Corporation (NPC). (All dollars in this problem are in thousands.) The project’s subsequent cash flows are critically dependent on whether a competitor’s product that is now under development is approved by the Food and Drug Administration. If the FDA rejects the competitive product upon the completion of its development, NPC’s product will have high sales and cash flows, but if the competitive product...
1. A project with an up-front cost at t=0 of $1500 is being considered by Nationwide...
1. A project with an up-front cost at t=0 of $1500 is being considered by Nationwide Pharmaceutical Corporation (NPC). (All dollars in this problem are in thousands.) The project’s subsequent cash flows are critically dependent on whether a competitor’s product is approved by the Food and Drug Administration. If the FDA rejects the competitive product, NPC’s product will have high sales and cash flows, but if the competitive product is approved, that will negatively impact NPC. There is a 75%...
1. An expansion project being considered by your firm has an initial cost of $8,000,000 and...
1. An expansion project being considered by your firm has an initial cost of $8,000,000 and expected net cash flows of $1,500,000 per year for the first 2 years, 1,800,000 for the third and fourth years, and $1,900,000 per year for the fifth and sixth years. All cash flows will occur at the end of each year. Assume that the project will be terminated at the end of the sixth year. Your firm’s cost of capital is 11%. Calculate the...
Suppose you are building a refrigerated extension to a storage facility. The cost of labor and...
Suppose you are building a refrigerated extension to a storage facility. The cost of labor and materials to build it are 58,000 and 160,000, respectively. The pre-tax discount rate is 12%, the tax rate is 20%, and the extension would add $220,000 to the value of the facility if sold in 10 years. Calculate the present value of the initial cost.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT