Question

A project needs an initial outlay of $3000 for equipment and will net a cash flow...

A project needs an initial outlay of $3000 for equipment and will net a cash flow of $250 for the next 15 years. At the end of the 15th year, there is a Salvage Value of $1000 for the equipment. What is the NPV of the project if the cost of capital is 15% p.a. effective (to the nearest dollar)? Select one

a. -$1415 b. -$945 c. $2250 d. $1585

Homework Answers

Answer #1

Please refer to the image below for the solution

Let me know in the comment section in case of any doubt.

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 project needs an initial outlay of $3000 for equipment and will net a cash flow...
A project needs an initial outlay of $3000 for equipment and will net a cash flow of $450 for the next 10 years. At the end of the 10th year, there is a Salvage Value of $1000 for the equipment. What is the NPV of the project if the cost of capital is 12% p.a. effective (to the nearest dollar)? Select one: a. -$953 b. $2500 c. -$135 d. $1585
PADICO is considering an investment project. The project requires an initial $5 million outlay for equipment...
PADICO is considering an investment project. The project requires an initial $5 million outlay for equipment and machinery. Sales are projected to be $2.5 million per year for the next four years. The equipment will be fully depreciated straight-line by the end of year 4. The cost of goods sold and operating expenses (not including depreciation) are predicted to be 30% of sales. The equipment can be sold for $500,000 at the end of year 4.Padico also needs to add...
PADICO is considering an investment project. The project requires an initial $5 million outlay for equipment...
PADICO is considering an investment project. The project requires an initial $5 million outlay for equipment and machinery. Sales are projected to be $2.5 million per year for the next four years. The equipment will be fully depreciated straight-line by the end of year 4. The cost of goods sold and operating expenses (not including depreciation) are predicted to be 30% of sales. The equipment can be sold for $500,000 at the end of year 4.Padico also needs to add...
PADICO is considering an investment project. The project requires an initial $5 million outlay for equipment...
PADICO is considering an investment project. The project requires an initial $5 million outlay for equipment and machinery. Sales are projected to be $2.5 million per year for the next four years. The equipment will be fully depreciated straight-line by the end of year 4. The cost of goods sold and operating expenses (not including depreciation) are predicted to be 30% of sales. The equipment can be sold for $500,000 at the end of year 4.Padico also needs to add...
A proposed project requires an initial cash outlay of $388,699 for equipment and an additional cash...
A proposed project requires an initial cash outlay of $388,699 for equipment and an additional cash outlay of $51,864 in year 1 to cover operating costs. During years 2 through 4, the project will generate cash inflows of $500,000 a year. What is the net present value of this project at a discount rate of 9 percent? Round your answer to the nearest whole dollar.
the benefit-cost ratio for a project with an initial outlay of $9000 and net cash flows...
the benefit-cost ratio for a project with an initial outlay of $9000 and net cash flows of %5000 p.a. for the next three years and a required rate of return of %10 p.a. is: A. $3434. B. 0.3815 C. 1.21 D.1.3815
6c1 A project has an initial outlay of $2,154. It has a single cash flow at...
6c1 A project has an initial outlay of $2,154. It has a single cash flow at the end of year 8 of $4,834. What is the internal rate of return (IRR) for the project? Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box) 6b1 Find the net present value (NPV) for the following series of future cash flows, assuming the company’s cost of capital is 14.71 percent. The initial outlay is...
A company is considering a 6-year project that requires an initial outlay of $18,000. The project...
A company is considering a 6-year project that requires an initial outlay of $18,000. The project engineer has estimated that the operating cash flows will be $4,000 in year 1, $7,000 in year 2, $7,000 in year 3, $7,000 in year 4, $7,000 in year 5, and $7,000 in year 6. At the end of the project, the equipment will be fully depreciated, classified as 5-year property under MACRS. The project engineer believes the equipment can be sold for $5,000...
A project has an initial outlay of $1,384. It has a single cash flow at the...
A project has an initial outlay of $1,384. It has a single cash flow at the end of year 8 of $5,106. What is the internal rate of return (IRR) for the project? Round the answer to two decimal places in percentage form.
A project with an initial outlay of $5164 has a required rate of return of 7.49%...
A project with an initial outlay of $5164 has a required rate of return of 7.49% and NPV of $801. Given the cash flows in the table below, find the cash flow in Year 2, to the nearest dollar. Year Cash Flow 1 $1153 2   CF2 = ??? 3 $1571 4 $2039
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT