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%.

Expert Solution

Year	Cash flow	PVIF@8%	Present value
0	$ (286,000)	1.000	$ (286,000)
1	$ 21,000	0.926	$ 19,444
2	$ 21,000	0.857	$ 18,004
3	$ 21,000	0.794	$ 16,670
4	$ 21,000	0.735	$ 15,436
5	$ 21,000	0.681	$ 14,292
6	$ 21,000	0.630	$ 13,234
7	$ 21,000	0.583	$ 12,253
8	$ 21,000	0.540	$ 11,346
9	$ 21,000	0.500	$ 10,505
10	$ 21,000	0.463	$ 9,727
11	$ 21,000	0.429	$ 9,007
12	$ 21,000	0.397	$ 8,339
13	$ 21,000	0.368	$ 7,722
14	$ 29,000	0.340	$ 9,873
15	$ 29,000	0.315	$ 9,142
16	$ 29,000	0.292	$ 8,465
17	$ 29,000	0.270	$ 7,838
18	$ 29,000	0.250	$ 7,257
19	$ 29,000	0.232	$ 6,720
20	$ 29,000	0.215	$ 6,222
21	$ 29,000	0.199	$ 5,761
22	$ 29,000	0.184	$ 5,334
23	$ 29,000	0.170	$ 4,939
24	$ 29,000	0.158	$ 4,573
25	$ 29,000	0.146	$ 4,235
26	$ 42,000	0.135	$ 5,678
27	$ 42,000	0.125	$ 5,258
28	$ 42,000	0.116	$ 4,868
29	$ 42,000	0.107	$ 4,508
30	$ 42,000	0.099	$ 4,174
31	$ 42,000	0.092	$ 3,865
32	$ 42,000	0.085	$ 3,578
33	$ 42,000	0.079	$ 3,313
34	$ 42,000	0.073	$ 3,068
35	$ 42,000	0.068	$ 2,841
36	$ 42,000	0.063	$ 2,630
37	$ 42,000	0.058	$ 2,435

Net present value			$ 6,555

jeff jeffy answered 1 year ago

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

Determine the payback period in years for a project that costs $45,000 and would yield after-tax...

Determine the payback period in years for a project that costs $45,000 and would yield after-tax cash flows of $9,000 the first year, $11,000 the second year, $14,000 the third year, $16,000 the fourth year, $20,000 the fifth year, and $26,000 the sixth year.

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.

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?

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

When a project entails significant social costs, the private net present value—the value of the project...

When a project entails significant social costs, the private net present value—the value of the project to its sponsor—exceeds the true (societal) net present value, namely the combined value to all the affected constituencies inclusive of the social costs. Should the externalities be taken into account when evaluating such a project? In your response, identify stakeholders’ roles, legalities, guidelines, policies or processes that might be considered/required to ensure a sponsor’s compliance or curb undesirable behavior? (See Finnerty Chapter 6) initial...

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...

Net Present Value—Unequal Lives Project 1 requires an original investment of $78,300. The project will yield...

Net Present Value—Unequal Lives Project 1 requires an original investment of $78,300. The project will yield cash flows of $14,000 per year for nine years. Project 2 has a calculated net present value of $18,100 over a seven-year life. Project 1 could be sold at the end of seven years for a price of $51,000. Use the Present Value of $1 at Compound Interest and the Present Value of an Annuity of $1 at Compound Interest tables shown below. Present...

Net Present Value—Unequal Lives Project 1 requires an original investment of $72,800. The project will yield...

Net Present Value—Unequal Lives Project 1 requires an original investment of $72,800. The project will yield cash flows of $17,000 per year for six years. Project 2 has a calculated net present value of $15,900 over a four-year life. Project 1 could be sold at the end of four years for a price of $62,000. Use the Present Value of $1 at Compound Interest and the Present Value of an Annuity of $1 at Compound Interest tables shown below. Present...

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...

Question