Question
Phone Home, Inc. is considering a new 4-year expansion project that requires an initial fixed asset...
Phone Home, Inc. is considering a new 4-year expansion project that requires an initial fixed asset investment of $3 million. The fixed asset will be depreciated straight-line to zero over its 4-year tax life, after which time it will have a market value of $225,000. The project requires an initial investment in net working capital of $330,000, all of which will be recovered at the end of the project. The project is estimated to generate $2,640,000 in annual sales, with costs of $1,056,000. The tax rate is 33 percent and the required return for the project is 15 percent. What is the net present value for this project?
- A. $681,409
- B. $714,056
- C. $744,595
- D. $742,208
- E. $741,335
Homework Answers
Answer #1
Not the answer you're looking for?
Similar Questions
Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed...
Down Under Boomerang, Inc., is considering a new three-year
expansion project that requires an initial fixed asset investment
of $2.79 million. The fixed asset will be depreciated straight-line
to zero over its three-year tax life. The project is estimated to
generate $2,110,000 in annual sales, with costs of $805,000. The
tax rate is 35 percent and the required return is 12 percent. The
project requires an initial investment in net working capital of
$330,000, and the fixed asset will have...
Hubrey Home Inc. is considering a new three-year expansion project that requires an initial fixed asset...
Hubrey Home Inc. is considering a new three-year expansion
project that requires an initial fixed asset investment of $3.8
million. The fixed asset falls into Class 10 for tax purposes (CCA
rate of 30 percent per year), and at the end of the three years can
be sold for a salvage value equal to its UCC. The project is
estimated to generate $2,640,000 in annual sales, with costs of
$835,000. If the tax rate is 35 percent, what is the...
Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment...
Cochrane, Inc., is considering a new three-year expansion
project that requires an initial fixed asset investment of $2.1
million. The fixed asset will be depreciated straight-line to zero
over its three-year tax life, after which time it will be
worthless. The project is estimated to generate $2,150,000 in
annual sales, with costs of $1,140,000.The project requires an
initial investment in net working capital of $150,000, and the
fixed asset will have a market value of $175,000 at the end of...
WXY Co plans a new four-year expansion project that requires an initial fixed asset investment of...
WXY Co plans a new four-year expansion project that requires an
initial fixed asset investment of $1.67 million. The fixed asset
will be depreciated straight-line to zero over its four-year tax
life, after which time it will have a market value of $435,000. No
bonus depreciation will be taken. The project requires an initial
investment in net working capital of $198,000, all of which will be
recovered at the end of the project. The project is estimated to
generate $1,850,000...
Quad Enterprises is considering a new three year expansion project that requires an initial fixed asset...
Quad Enterprises is considering a new three year expansion
project that requires an initial fixed asset investment of $2.29
million. The fixed asset will be depreciated straight-line to zero
over its three year tax life. The project is estimated to generate
$1,790,000 in annual sales, with the costs of $700,000. The project
requires an initial investment in net working capital of $410,000,
and the fixed asset will have a market value of $420,000 at the end
of the project. A.)...
Down Under Boomerang, Inc., is considering a new 4-year expansion project that requires an initial fixed...
Down Under Boomerang, Inc., is considering a new 4-year
expansion project that requires an initial fixed asset investment
of $4,212,000. The fixed asset will be depreciated straight-line to
zero over its 4-year tax life, after which time it will be
worthless. The project is estimated to generate $3,744,000 in
annual sales, with costs of $1,497,600. The tax rate is 34 percent
and the required return is 17 percent, the NPV for this project is
$
Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment...
Quad Enterprises is considering a new three-year expansion
project that requires an initial fixed asset investment of $2.52
million. The fixed asset will be depreciated straight-line to zero
over its three-year tax life and is estimated to have a market
value of $294584 at the end of the project. The project is
estimated to generate $2146553 in annual sales, with costs of
$809789. The project requires an initial investment in net working
capital of $360133. If the tax rate is...
Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment...
Quad Enterprises is considering a new three-year expansion
project that requires an initial fixed asset investment of $2.67
million. The fixed asset will be depreciated straight-line to zero
over its three-year tax life and is estimated to have a market
value of $297260 at the end of the project. The project is
estimated to generate $2043001 in annual sales, with costs of
$843186. The project requires an initial investment in net working
capital of $374861. If the tax rate is...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset...
Summer Tyme, Inc., is considering a new 3-year expansion project
that requires an initial fixed asset investment of $2.916 million.
The fixed asset will be depreciated straight-line to zero over its
3-year tax life, after which time it will have a market value of
$226,800. The project requires an initial investment in net working
capital of $324,000. The project is estimated to generate
$2,592,000 in annual sales, with costs of $1,036,800. The tax rate
is 31 percent and the required...
Keiper, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment...
Keiper, Inc., is considering a new three-year expansion project
that requires an initial fixed asset investment of $2.7 million.
The fixed asset will be depreciated straight-line to zero over its
three-year tax life, after which time it will be worthless. The
project is estimated to generate $2,080,000 in annual sales, with
costs of $775,000. The tax rate is 35 percent and the required
return on the project is 12 percent. What is the project’s NPV?
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 2 minutes ago
asked 12 minutes ago
asked 14 minutes ago
asked 23 minutes ago
asked 36 minutes ago
asked 44 minutes ago
asked 56 minutes ago
asked 59 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago