Question

Given the following information and assuming straight-line depreciation to zero, what is the NPV for this project? Initial investment in fixed assets = $800,000 initial investment in net working capital = $200,000 life = 4 years cost savings = $400,000 per year salvage value = $10,000 tax rate = 35% discount rate = 12%

Answer #1

Calculate the NPV for the following project. Use straight line
depreciation over four-year period. Assume zero salvage at the end
of the four years, with no required additional working capital.
Calculate the NPV to the nearest cent xx.xx and enter without the
dollar sign. WACC 8.4% Additional investment in fixed assets
(depreciable basis) $100,000 Straight-line depreciation rate 25%
Annual sales revenues (constant for all the years) $75,000
Operating costs (excl. depreciation) (also constant) $25,000 Tax
rate 21.0%

Calculate the NPV for the the following projectL Ue straight
line depreciation over four - year period. Assume zero salvage at
the end of the four years, with no additional working capital.
Calculate the NPV to the nearest cent xx.xx
WACC: 13.1%
Additional investment in fixed assets (depreciable basis) :
100,000
Straight line depreciation rate: 25%
Annual sales revenue (constant for all years) : 75,000
Operating costs ( excl. deprecaiton) (also constant) :
25,000
Tax rate: 21.0%

Consider a 9-year project with the following information:
initial fixed asset investment = $430,000; straight-line
depreciation to zero over the 9-year life; zero salvage value;
price = $32; variable costs = $17; fixed costs = $167,700; quantity
sold = 98,943 units; tax rate = 33 percent. How sensitive is OCF to
changes in quantity sold?

Q8
3. Calculate the NPV for the following project. Use straight
line depreciation over four-year period. Assume zero salvage at the
end of the four years, with no required additional working
capital. Calculate the NPV to the nearest cent xx.xx
and enter without the dollar sign.
WACC
5.7%
Additional investment in fixed assets (depreciable basis)
$100,000
Straight-line depreciation
rate
25%
Annual sales revenues (constant for three years) $75,000
Operating costs (excl. depreciation) (also constant) $25,000...

Consider a project with the following information: Initial fixed
asset investment = $490,000; straight-line depreciation to zero
over the 4-year life; zero salvage value; price = $42; variable
costs = $25; fixed costs = $192,000; quantity sold = 92,000 units;
tax rate = 21 percent.
How sensitive is OCF to changes in quantity sold? (Do
not round intermediate calculations and round your answer to 2
decimal places, e.g., 32.16.)

XY Inc. is considering a three-year project. The initial
investment on the fixed asset will be $90,000. Fixed asset will be
depreciated using straight-line method to zero over the life of the
project. The net working capital investment will be $50,000. The
project is estimated to generate $200,000 in annual sales, with
cost of $150,000. Assume the tax rate is 35% and required return is
10%, what is the NPV of this project?
$-33,065
$30,971
$15,428

Consider a four-year project with the following information:
initial fixed asset investment = $476061; straight-line
depreciation to zero over the four-year life; zero salvage value;
price = $34; variable costs = $24; fixed costs = $194366; quantity
sold = 79941 units; tax rate = 31 percent. Calculate the
sensitivity of the OCF to changes in the quantity sold. (Do not
round intermediate calculations and round your final answer to 2
decimal places. Omit the "$" sign and commas in your...

project's 3-year life. What is the project's NPV? Do
not round the intermediate calculations and round the final answer
to the nearest whole number.
WACC
10.0%
Net investment in fixed assets (depreciable basis)
$70,000
Required net operating working capital
$10,000
Straight-line depreciation rate
33.333%
Annual sales revenues
$70,000
Annual operating costs (excl. depreciation)
$30,000
Expected pre-tax salvage value
$5,000
Tax rate
35.0%
a.
0$12,982
b.
0$14,922
c.
0$14,773
d.
0$17,011
e.
0$15,668

A company is considering an online shopping project that will
require $120,000 in fixed assets and require another $25,000 in net
working capital at the initial of the project. At the second year
and the third year, due to a more efficient operation, the company
can free up $2,500 and $2,800 in net working capital for this
project, respectively. However, in the fourth year, due to some
emerging orders, the company require another $3,000 in net working
capital for this...

Genoa company is considering a new investment and the relevant
information is below. The equipment depreciates at a straight-line
basis over the project's three-year life, would have no salvage
value, and requires additional net operating working capital that
would be recovered at the end of the project's life. Revenues and
other operating costs are expected to be constant over the
project's life. cash flows are constnt for the life of the project.
What is the project's NPV?
WACC
9%
Net...

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