Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

A company is planning to invest $75,000 (before taxes) in a personnel training program. The $75000 outlay will be charged off as an expense by the firm this year (Year 0). The returns estimated from the program in the forms of greater productivity and less employee turnover are as follows (on an after-tax basis):

Years 1-10: $7,500 per year
Years 11-20: $22,500 per year

The company has estimated its cost of capital to be 15%. Assume that the entire $75,000 is paid at time zero (the beginning of the project). The marginal tax rate for the firm is 40%. Based on the net present value criterion, should the firm undertake the training program?

 

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M926469

Have any Question? 


Related Questions in Basic Finance

Lance industries borrowed 130000 the company plans to set

Lance Industries borrowed $130,000. The company plans to set up a sinking fund that will repay the loan at the end of 18 years. Assume a 6% interest rate compounded semiannually. What amount must Lance Industries pay int ...

During the financial crisis libor was manipulated libor is

During the financial crisis LIBOR was manipulated. LIBOR is a frequent index in adjustable rate mortgages. what made it relatively easy to manipulate LIBOR?

Compute the price of an american call option on nbspthe

Compute the price of an American call option on  the price of a zero-coupon bond (ZCB) that matures at time t=10 and that has face value 100.. The option has expiration t=6 and strike =80.

You were recently hired as management director of the new i

You were recently hired as management director of the new I Can Business Incorporated (ICBI). You have been asked to establish policies and systems for the business. The first one you choose to work on is a financial rep ...

It is an old-age dilemma from the business world that

It is an old-age dilemma from the business world that suggests business expansion boosts revenue and accelerates positive cash flow. However, expansion may also lead to higher expenses, greater forecasting uncertainties, ...

What are the tasks or abilities that you need to be skilled

What are the tasks or abilities that you need to be skilled in if you are studying Finance, and how will they need to be performed in work settings?

This is a public finance and budgeting course must be apa

THIS IS A PUBLIC FINANCE AND BUDGETING COURSE / MUST BE APA FORMAT AND "A" WORK Compose an essay of no less than 500 words discussing the topics covered in this unit. Your essay should include the following: - Describe a ...

Choice of monetary policywhen does the fed use a

Choice of Monetary Policy: When does the Fed use a stimulative monetary policy, and when does it use a restrictive monetary policy? What is a criticism of a stimulative monetary policy? What is the risk of using a moneta ...

1 a 3 year-bond is paying a coupon rate of 10 per year

1. A 3 year-bond is paying a coupon rate of 10% per year semi-annually. The par value of the bond is R1000 and the annual market interest rate is 8%. a) Calculate the price of the bond today and 6 months from now after p ...

The balance after 11 months including interest on a loan at

The balance after 11 months, including interest, on a loan at 9.6% is 15,558.40. What are the principal and interest components of the balance? Round your final answers 2 decimal places.

  • 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

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate