Question

Skyline Corp. will invest $160,000 in a project that will not begin to produce returns until...

Skyline Corp. will invest $160,000 in a project that will not begin to produce returns until the end of the 4th year. From the end of the 4th year until the end of the 12th year (9 periods), the annual cash flow will be $41,000. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. Calculate the net present value if the cost of capital is 11 percent.

b. Should the project be undertaken?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Year Cashflows PVF at 11% Present value
0 -160000 1 -160000
1 0 0.900901 0
2 0 0.811622 0
3 0 0.731191 0
4 41000 0.658731 27007.97
5 41000 0.593451 24331.5
6 41000 0.534641 21920.27
7 41000 0.481658 19747.99
8 41000 0.433926 17790.99
9 41000 0.390925 16027.92
10 41000 0.352184 14439.56
11 41000 0.317283 13008.62
12 41000 0.285841 11719.47
Net present value 5994
Yes, the project shall be accepted
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Skyline Corp. will invest $270,000 in a project that will not begin to produce returns until...
Skyline Corp. will invest $270,000 in a project that will not begin to produce returns until the end of the 4th year. From the end of the 4th year until the end of the 12th year (9 periods), the annual cash flow will be $52,000.    Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.    a. Calculate the net present value if the cost of capital...
Twelve Inch Toes Corp. will invest $206,000 in a project that will not begin to produce...
Twelve Inch Toes Corp. will invest $206,000 in a project that will not begin to produce returns until the third year. From the end of the third year until the end of the tenth year (8 periods), the annual cash flow will be $54,000. a. Calculate the net present value if the cost of capital is 13 percent. should it be undertaken?
Aerospace Dynamics will invest $100,000 in a project that will produce the following cash flows. The...
Aerospace Dynamics will invest $100,000 in a project that will produce the following cash flows. The cost of capital is 15 percent. (Note that the fourth year’s cash flow is negative.) Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.    Year Cash Flow 1 $ 50,000 2 36,000 3 30,000 4 (27,000 ) 5 60,000 a. What is the net present value of the project? (Negative amount should be...
Aerospace Dynamics will invest $135,000 in a project that will produce the following cash flows. The...
Aerospace Dynamics will invest $135,000 in a project that will produce the following cash flows. The cost of capital is 11 percent. (Note that the fourth year’s cash flow is negative.) Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year Cash Flow 1 $ 46,000 2 54,000 3 68,000 4 (53,000 ) 5 120,000 a. What is the net present value of the project?
Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment....
Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment. Project H represents an investment in a hydraulic lift. Keller wishes to use a net present value profile in comparing the projects. The investment and cash flow patterns are as follows: Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.    Project E Project H ($41,000 Investment) ($42,000 Investment) Year Cash Flow Year Cash...
Aerospace Dynamics will invest $150,000 in a project that will produce the following cash flows. The...
Aerospace Dynamics will invest $150,000 in a project that will produce the following cash flows. The cost of capital is 10 percent. (Note that the fourth year’s cash flow is negative.)    Year Cash Flow 1 $ 45,000 2 57,000 3 65,000 4 (48,000 ) 5 140,000 a. What is the net present value of the project? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)   ...
Turner Video will invest $94,500 in a project. The firm’s cost of capital is 10 percent....
Turner Video will invest $94,500 in a project. The firm’s cost of capital is 10 percent. The investment will provide the following inflows. Use Appendix A for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year Inflow 1 $ 33,000 2 35,000 3 32,000 4 38,000 5 45,000 The internal rate of return is 15 percent. a. If the reinvestment assumption of the net present value method is used, what will be the...
Turner Video will invest $92,500 in a project. The firm’s cost of capital is 11 percent....
Turner Video will invest $92,500 in a project. The firm’s cost of capital is 11 percent. The investment will provide the following inflows. Use Appendix A for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year Inflow 1 $ 32,000 2 34,000 3 35,000 4 40,000 5 38,000 The internal rate of return is 15 percent. a. If the reinvestment assumption of the net present value method is used, what will be the...
Turner Video will invest $62,500 in a project. The firm’s cost of capital is 6 percent....
Turner Video will invest $62,500 in a project. The firm’s cost of capital is 6 percent. The investment will provide the following inflows. Use Appendix A for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year Inflow 1 $ 17,000 2 19,000 3 23,000 4 27,000 5 31,000 The internal rate of return is 11 percent. a. If the reinvestment assumption of the net present value method is used, what will be the...
2) If you invest $8,900 per period for the following number of periods, how much would...
2) If you invest $8,900 per period for the following number of periods, how much would you have: Use Appendix C for an approximate answer, but calculate your final answer using the formula and financial calculator methods. a. In 7 years at 9 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Future value $ _________ b. In 25 years at 9 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT