Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

A company is planning to invest $100,000 (before tax) in a personnel training program. The $100,000 outlay will be charged off as an expense by the firm this year (year 0). The returns from the program in the form of greater productivity and a reduction in employee turnover are estimated as follows (on an after-tax basis):

Years 1-10: $10,000 per year

Years 11-20: $22,000 per year

The company has estimated its cost of capital to be 12 percent. Assume that the entire $100,000 is paid at time 0 (the beginning of the project). The marginal tax rate for the firm is 40 percent. Should the firm undertake the training program? Why or why not?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M944090

Have any Question? 


Related Questions in Basic Finance

Sankey inc has current assets of 6000 net fixed assets of

Sankey, Inc., has current assets of $6,000, net fixed assets of $23,200, current liabilities of $5,600, and long-term debt of $13,600. (Do not round intermediate calculations.) What is the value of the shareholders' equi ...

Show how a combination of interest rate caps and floors can

Show how a combination of interest rate caps and floors can be equivalent to an interest rate swap ? What are the advantages and disadvantages of an interest rate collar over an interest rate cap? Explain how the Black m ...

Assume for this question only that kenny and melissa were

Assume, for this question only, that Kenny and Melissa were married today. They went straight to Kenny's lawyer's office to execute new wills. On the way home from executing a valid will leaving all assets to Melissa, Ke ...

As mentioned in the chapter during early 2010 investors

As mentioned in the chapter, during early 2010, investors began to worry that the government of Greece might default on its bonds. The rating agencies downgraded Greek bonds several times. Following one of the rating dow ...

1 what is the scientific method and how does it guide

1. What is the scientific method, and how does it guide research? 2. Discuss the basic characteristics of scientific inquiry (empiricism, objectivity, and accumulation) and their value to science. 3. In what ways is scie ...

Locate a newspaper or magazine article that reports a

Locate a newspaper or magazine article that reports a behavioral science research project. a. Determine whether the project is a descriptive, a correlational, or an experimental research design. b. What variables are mea ...

The manufacturer of a fertilizer guarantees that with the

The manufacturer of a fertilizer guarantees that, with the aid of the fertilizer, 80% of planted seeds will germinate. Suppose the manufacturer is correct. If 9 seeds planted with the fertilizer are randomly selected, wh ...

You wish to establish a scholarship fund for students at

You wish to establish a scholarship fund for students at Clever College. The fund wouldpay an annual scholarship that would start at $5,000 awarded one year from now andincrease by 3.5% per year forever. If the fund coul ...

1 what is exchange-rate risk how can exchangerate risk be

1. What is exchange-rate risk? How can exchangerate risk be hedged using forward, futures, and options contracts? 2. How might an investor use forward, futures, and options contracts to speculate on the future value of a ...

1 demonstrate your understanding of the relationship

1. Demonstrate your understanding of the relationship between logistical capabilities and competencies by tracing the evolution of logistical work to universal competencies. Does this logic have any practical application ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro