Question

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.

Homework Answers

Answer #1

Ans $ 247.93

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%, the Net Present Value of the project is $ 247.93

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
Consider a project that costs $500 now is is expected to generate $250 in net revenues...
Consider a project that costs $500 now is is expected to generate $250 in net revenues at the end of each of the next three years. If the MARR is 6%, the future worth (year 3) of this project is most nearly ________. A. $300 B. $210 C. $225 D. $200 E. None of the above
Temple Corp. is considering a new project whose data are shown below. The equipment that would...
Temple Corp. is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated by the straight-line method over its 3-year life, and would have a zero salvage value. No change in net operating working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's NPV?  Do not round the intermediate calculations and round the final...
8- Temple Corp. is considering a new project whose data are shown below. The equipment that...
8- Temple Corp. is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated by the straight-line method over its 3-year life, and would have a zero salvage value. No change in net operating working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's NPV? Do not round the intermediate calculations and round...
A production project will generate an expected operating cash flow of $50,000 per year for 4...
A production project will generate an expected operating cash flow of $50,000 per year for 4 years (years 1 – 4). Undertaking the project will require an increase in the company’s net working capital (inventory) of $10,000 today (year 0). At the end of the project (year 4), inventory will return to the original level. The project would cost $150,000. The marginal tax rate is 35%. The weighted average cost of capital for the firm is 9%. Sketch a timeline...
You are considering the following project. What is the NPV of the project? Project life: 3...
You are considering the following project. What is the NPV of the project? Project life: 3 years Equipment:      Cost: $18,000      Economic life: 3 years      Salvage value: $4,000 Initial investment in net working capital: $2,000 Revenue: $13,000 in year 1, with a nominal growth rate of 5% per year Fixed cost: $3,000 in year 1 Variable cost: 30% of revenue Corporate tax rate (T): 40% WACC for the project: 10% This project does not create incidental effect.
Foley Systems is considering a new project whose data are shown below. Under the new tax...
Foley Systems is considering a new project whose data are shown below. Under the new tax law, the equipment for the project is eligible for 100% bonus depreciation, so it will be fully depreciated at t = 0. After the project's 3-year life, the equipment would have zero salvage value. The project would require additional net operating working capital (NOWC) that would be recovered at the end of the project's life. Revenues and operating costs are expected to be constant...
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.
You are considering the following project. What is the NPV of the project? Project life: 3...
You are considering the following project. What is the NPV of the project? Project life: 3 years Equipment:      Cost: $18,000      Economic life: 3 years      Salvage value: $4,000 Initial investment in net working capital: $2,000 Revenue: $13,000 in year 1, with a nominal growth rate of 5% per year Fixed cost: $3,000 in year 1 Variable cost: 30% of revenue Corporate tax rate (T): 40% WACC for the project: 10% This project does not create incidental effect. Select...
a capital project with a 5 year life and cost of $48000 generates additional revenue as...
a capital project with a 5 year life and cost of $48000 generates additional revenue as follows: $5000 in year 1 $12000 in year2 $15000 in year 3 $18000 in year 4 $20000 in year 5 based on a discount rate is 4%, what is the present value of the project?
What is the annual operating cash flow for a 10 year project that has annual sales...
What is the annual operating cash flow for a 10 year project that has annual sales of $650,000, its variable cost are 70% of sales and has annual fixed cost of $130,000. The project requires new equipment at a cost of $50,000 and installation costs of $3,000 and a plant that costs $70,000. Depreciation is under the straight line method and the equipment has an estimated life of 10 years and the plant an estimated life of 30 years. The...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT