Question

For a company, the project costs $50,000 now and $6000 per year for 7 years beginning...

For a company, the project costs $50,000 now and $6000 per year for 7 years beginning 1 year from now with increases of 8% per year thereafter for the next 9 years. Calculate present worth ($) with a real interest rate of 10% per year and an inflation rate of 4% per year

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A self-employed engineer is on contract with Dow Chemical, currently working in a relatively high-inflation country....
A self-employed engineer is on contract with Dow Chemical, currently working in a relatively high-inflation country. She wishes to calculate a project’s present worth with estimated costs of $35,000 now and $7,000 per year for 5 years beginning one year from now with increases of 12% per year thereafter for the next 8 years. Use a real interest rate of 15% per year to make the calculations: (a) without an adjustment for inflation (b) considering inflation at a rate of...
1- Costs for maintenance of buildings at an industrial complex are expected to be $1,000 in...
1- Costs for maintenance of buildings at an industrial complex are expected to be $1,000 in year three, $1,200 in year four and amounts increasing by $200 per year thereafter through year nine. At an interest rate of 12% per year, calculate the equivalent future worth at year 9. 2- The costs of fuel for a smelting operation are expected to be $50,000 in year three, $52,500 in year four and amounts increasing by 5% per year thereafter through year...
A project your firm is considering for implementation has these estimated costs and revenues: an investment...
A project your firm is considering for implementation has these estimated costs and revenues: an investment cost of $50,000; maintenance costs that start at $5,000 at the end of year (EOY) 1 and increase by $1,000 for each of the next 4 years, and then remain constant for the following 5 years; savings of $20,000 per year (EOY 1–10); and finally a resale value of $35,000 at the EOY 10. If the project has a 10-year life and the firm’s...
Project L costs $50,000, its expected cash inflows are $8,000 per year for 8 years, and...
Project L costs $50,000, its expected cash inflows are $8,000 per year for 8 years, and its WACC is 9%. What is the project's MIRR? Round your answer to two decimal places. Do not round your intermediate calculations.
A project with a 3-year life will cost $50,000 now, and then generate revenues of $21,000...
A project with a 3-year life will cost $50,000 now, and then generate revenues of $21,000 and operating costs of $3,000 in year 1, $24,000 in revenue and operating costs of $3,000 in year 2, and $25,000 in revenue and operating costs of $3,000 in year 3. If the discount rate is 10%, what is the Net Present Value of the project? Round to the nearest whole number.
Project L costs $50,000, its expected cash inflows are $15,000 per year for 8 years, and...
Project L costs $50,000, its expected cash inflows are $15,000 per year for 8 years, and its WACC is 10%. What is the project's MIRR? Do not round intermediate calculations. Round your answer to two decimal places.
Example : Project A Project B year 1 6000 2000 Year 2 0 3000 Year 3...
Example : Project A Project B year 1 6000 2000 Year 2 0 3000 Year 3 2500 3000 Year 4 2500 3000 (a) If the discount rate is 8%, what is the present value of project A? (b) If the discount rate is 8%, what is the future value of project A in year 4? No financial calculator, could you please provide normal formula calculate with details?
Calculate the present worth of all costs for a newly acquired machine with an initial cost...
Calculate the present worth of all costs for a newly acquired machine with an initial cost of $32,000, no trade-in value, a life of 13 years, and an annual operating cost of $15,000 for the first 4 years, increasing by 10% per year thereafter. Use an interest rate of 10% per year. The present worth of all costs for a newly acquired machine is determined to be $
Crown Company is growing quickly. Dividends are expected to grow 15 percent per year over the...
Crown Company is growing quickly. Dividends are expected to grow 15 percent per year over the next two years, 10 percent per year for the following three years, and 5 percent per year thereafter. The required rate of return (rs) on the stock is 9 percent, and the company recently paid a dividend of $4.00. (8 points)       a) Calculate the present value of each dividend for years 1-5.       b) Calculate the stock price as of the end of...
1. A construction company desires to accumulate GH¢25,000 over a ten-year period to enable it to...
1. A construction company desires to accumulate GH¢25,000 over a ten-year period to enable it to replace its ageing excavator. For an interest rate of 10% per annum compounded semi- annually, what is the required semi-annual payment? 2. A small construction company is considering the purchase of a used bulldozer for GH¢61,000. If the company purchases the bulldozer now, the equivalent future amount in year 4 that the company is paying for the dozer at 4% per year interest is?...