Question

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%. What is the net present value of this project? Round to the nearest penny. Do not include a dollar sign.

Answer #1

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 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 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 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 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 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 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 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...

XYZ Company is considering whether a project requiring the
purchase of new equipment is worth investing. The cost of a new
machine is $340,000 including shipping and installation. The
project will increase annual revenues by $400,000 and annual costs
by $100,000. The machine will be depreciated via straight-line
depreciation for three years to a salvage value of $40,000. If the
firm does this project, $30,000 in net working capital will be
required. What is the annual cash flow of this...

XYZ Company is considering whether a project requiring the
purchase of new equipment is worth investing. The cost of a new
machine is $340,000 including shipping and installation. The
project will increase annual revenues by $400,000 and annual costs
by $100,000. The machine will be depreciated via straight-line
depreciation for three years to a salvage value of $40,000. If the
firm does this project, $30,000 in net working capital will be
required. What is the annual cash flow of this...

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