Question

You are evaluating a capital project with a Net Investment of $95,000, which includes an increase...

You are evaluating a capital project with a Net Investment of $95,000, which includes an increase in net working capital of $5,000. The project has a life of 9 years with an expected salvage value of $3,000. The project will be depreciated via simplified straight-line depreciation. Revenues are expected to increase by $20,000 per year and operating expenses by $4,000 per year. The firm's marginal tax rate is 40 percent and the cost of capital for this project is 8%. What is the net present value of this project? Round to the nearest penny. Do not include a dollar sign.

Homework Answers

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
You are evaluating a capital project with a Net Investment of $95,000, which includes an increase...
You are evaluating a capital project with a Net Investment of $95,000, which includes an increase in net working capital of $5,000. The project has a life of 9 years with an expected salvage value of $3,000. The project will be depreciated via simplified straight-line depreciation. Revenues are expected to increase by $20,000 per year and operating expenses by $4,000 per year. The firm's marginal tax rate is 40 percent and the cost of capital for this project is 8%....
You are evaluating a capital project with a net investment of $95,000, which includes an increase...
You are evaluating a capital project with a net investment of $95,000, which includes an increase in net working capital of $5,000. The project has a life of nine years and an expected salvage value of $3,000. The project will be depreciated via simplified straight-line depreciation. Revenues are expected to increase by $20,000 per year and operating expenses by $4,000 per year. The firm’s marginal tax rate is 40%, and the cost of capital for this project is 8%. What...
You are evaluating a capital project with a Net Investment of $400,000, which includes an increase...
You are evaluating a capital project with a Net Investment of $400,000, which includes an increase in net working capital of $16,000. The project has a life of 12 years with an expected salvage value of $3,000. The project will be depreciated via simplified straight-line depreciation. Revenues are expected to increase by $90,000 per year and operating expenses by $8,000 per year. The firm's marginal tax rate is 40 percent and the cost of capital for this project is 15%....
You are evaluating a capital project with a Net Investment of $400,000, which includes an increase...
You are evaluating a capital project with a Net Investment of $400,000, which includes an increase in net working capital of $16,000. The project has a life of 12 years with an expected salvage value of $3,000. The project will be depreciated via simplified straight-line depreciation. Revenues are expected to increase by $90,000 per year and operating expenses by $8,000 per year. The firm's marginal tax rate is 40 percent and the cost of capital for this project is 15%....
You are evaluating a capital project with a Net Investment of $800,000, which includes an increase...
You are evaluating a capital project with a Net Investment of $800,000, which includes an increase in net working capital of $8,000. The project has a life of 20 years with an expected salvage value of $100,000. The project will be depreciated via simplified straight-line depreciation. Revenues are expected to increase by $120,000 per year and operating expenses by $14,000 per year. The firm's marginal tax rate is 40 percent and the cost of capital for this project is 12%....
You are evaluating a capital budgeting replacement project with a net investment of $85,000, which includes...
You are evaluating a capital budgeting replacement project with a net investment of $85,000, which includes both an after-tax salvage from the old asset of $5,000 and an additional working capital investment of $10,000. The expected annual incremental cash flows after-tax is $14,000. The project has a life of 9 years with an expected terminal value at the end of the project of $13,000. The cost of capital of the firm is 10 percent and the firm’s marginal tax rate...
14: A firm is evaluating a new capital project. The firm spent $45,000 on a market...
14: A firm is evaluating a new capital project. The firm spent $45,000 on a market study and $30,000 on consulting three months ago. If the firm approves the project, it will spend $448,000 on new machinery, $15,000 on installation, and $5,000 on shipping. The machine will be depreciated via simplified straight-line depreciation over its 8-year life. The expected sales increase from this new project is $700,000 a year, and the expected incremental expenses are $250,000 a year. In order...
show work on how to get the answer Your company is evaluating a capital project with...
show work on how to get the answer Your company is evaluating a capital project with equipment costing $120,600. Shipping costs are estimated at $2000 and installation is expected to be $1300. This equipment has an expected life of 18 years and a salvage value of $1400. Revenues are expected to increase by $15,000 per year and cash operating expenses by $500 per year. An additional working capital investment of $900 is also required, and the firm’s marginal tax rate...
You are a project manager. You are estimating cash flows of a potential project that requires...
You are a project manager. You are estimating cash flows of a potential project that requires investment of $250,000 in a machine, including installation cost, and $40,000 in working capital which will be fully captures at the end of the project. The marchine has the estimated life of 5 years and will be depreciated vie simplified straight-line method. The project is expected to raise the firm's revenues by $330,000 and costs by $125,000 annually. Since the trend of the product...
You are a project manager. You are estimating cash flows of a potential project that requires...
You are a project manager. You are estimating cash flows of a potential project that requires investment of $250,000 in a machine, including installation cost, and $40,000 in working capital which will be fully captures at the end of the project. The marchine has the estimated life of 5 years and will be depreciated vie simplified straight-line method. The project is expected to raise the firm's revenues by $330,000 and costs by $125,000 annually. Since the trend of the product...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT