Question

In: Finance

PERIOD 0 1 2 3 4 EBIT $46,000 $57,000 $70,000 $80,000 The above table illustrates earnings...

PERIOD 0 1 2 3 4
EBIT $46,000 $57,000 $70,000 $80,000

The above table illustrates earnings before interest and taxes for a capital investment project. Additional information for this project:

  • initial cost of the investment = $600,000
  • no change in net working capital
  • tax rate = 32.0%
  • depreciation = accelerated using the MACRS factors: 0.33330, 0.44450, 0.1481, 0.0741
  • projected cash flow from salvage = $0
  • projected erosion costs = $30,000 in Year 1 and $40,000 in Year 2

If the opportunity cost of capital is 11.2%, what is the net present value of this project?

Solutions

Expert Solution

Net present Value of the Project is -$354,121.47


Related Solutions

PERIOD 0    1 2 3   4 EBIT   $46,000 $57,000 $70,000 $80,000 The above table illustrates...
PERIOD 0    1 2 3   4 EBIT   $46,000 $57,000 $70,000 $80,000 The above table illustrates earnings before interest and taxes for a capital investment project. Additional information for this project: initial cost of the investment = $600,000 no change in net working capital tax rate = 32.0% depreciation = accelerated using the MACRS factors: 0.33330, 0.44450, 0.1481, 0.0741 projected cash flow from salvage = $0 projected erosion costs = $30,000 in Year 1 and $40,000 in Year 2 If...
Firm 2 LOW HIGH Firm 1 LOW $40,000     $40,000 $80,000     $10,000 HIGH $10,000     $80,000 $70,000     $70,000...
Firm 2 LOW HIGH Firm 1 LOW $40,000     $40,000 $80,000     $10,000 HIGH $10,000     $80,000 $70,000     $70,000 1) What is the pure strategy Nash equilibrium (outcome) of the game? 2)Is the NE unique? If not, suggest a possible remedy to resolve the redundancy.
A= 1 2 4 0 1 -2 -1 0 1 2 0 3 8 1 4...
A= 1 2 4 0 1 -2 -1 0 1 2 0 3 8 1 4 . Let W denote the row space for A. (a) Find an orthonormal basis for W and for W⊥. (b) Compute projW⊥(1 1 1 1 1 ).
   Years 0 1 2 3 4 Investment Outlay Equipment cost ($350,000) Shipping and installation ($70,000)...
   Years 0 1 2 3 4 Investment Outlay Equipment cost ($350,000) Shipping and installation ($70,000) Increase in inventory ($55,000) Increase in accounts payable $18,000 Total initial investment ($457,000) Operating cash flow $        113,990 $           96,350 $        140,450 $        152,210 Total termination cash flow $           53,250 Project Cash Flows Net cash flows ($457,000) $113,990 $96,350 $140,450 $205,460 Required return (used as the discount rate) 12% Payback period (2.22) Present value of net cash inflows Present value of cash outflows Profitability...
exampleInput.txt 1 2 3 0 2 3 4 0 1 3 5 0 1 2 6...
exampleInput.txt 1 2 3 0 2 3 4 0 1 3 5 0 1 2 6 1 5 6 8 2 4 6 7 3 4 5 9 10 5 8 9 4 7 9 6 7 8 6 How can I detect when 'cin' starts reading from a new line. The amount of numbers in each row is unknown. I need them in type 'int' to use the data.
0. 0. 0. 0.0. 0. 0. 0. 0. 1. 1. 1. 1. 1. 1. 2. 2. 2. 3. 4.
0. 0. 0. 0.0. 0. 0. 0. 0.   1. 1. 1. 1. 1. 1. 2. 2. 2. 3.   4. A.)MEAN – B.)MEDIAN - C.)MODE - D.)STANDARD DEVIATION – E.)5 NUMBER SUMMARY – F.)BOX AND WHISKERS PLOT – G.) OUTLIERS-
0. 0. 0. 0.0. 0. 0. 0. 0. 1. 1. 1. 1. 1. 1. 2. 2. 2. 3. 4.
0. 0. 0. 0.0. 0. 0. 0. 0.   1. 1. 1. 1. 1. 1. 2. 2. 2. 3.   4. A.)5 NUMBER SUMMARY – B.)BOX AND WHISKERS PLOT – C.) OUTLIERS-
Calculate Payback period, Net Present Value and Benefit Cost Ratio Period 0 1 2 3 4...
Calculate Payback period, Net Present Value and Benefit Cost Ratio Period 0 1 2 3 4 5 Year 2,019 2020 2021 2022 2023 2024 Cash Flows -30,000 11,000 x .8929 = 9821.9 14,000 x .7972 = 11,160.8 10,000 x .7118= 7,118 7,000 x .6335 = 4434.5 12,000 x .5674 = 6808.8
Year Cash Flow 0 -3,024 1 17,172 2 -36,420 3 34,200 4 -12,000 consider the above...
Year Cash Flow 0 -3,024 1 17,172 2 -36,420 3 34,200 4 -12,000 consider the above cash flow. the IRRs, from smaller to largest are a)_______ % b) ________ % c) _______ % ( Hint: search between 20% and 70%) answer rounded 2 decimal places
A = (1 −7 5 0 0 10 8 2 2 4 10 3 −4 8...
A = (1 −7 5 0 0 10 8 2 2 4 10 3 −4 8 −9 6) (1) Count the number of rows that contain negative components. (2) Obtain the inverse of A and count the number of columns that contain even number of positive components. (3) Assign column names (a,b,c,d) to the columns of A. (4) Transform the matrix A into a vector object a by stacking rows. (5) Replace the diagonal components of A with (0,0,2,3). Hint:...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT