Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem: Avanti, Inc. is faced with an investment project. The following data is associated with this project:

 

 

 Allowable Depreciation 

Year

Net Income*

for 3-Yr. MACRS class

1

$50,000

0.33

2

60,000

0.45

3

70,000

0.15

4

60,000

0.07

Suppose no interest expenses & a zero tax rate.

The project involves an initial investment of dollar 100,000 in equipment that falls in the three year MACRS class and has an estimated salvage value of dollar 15,000. In addition, the company expects an initial increase in net operating working capital of $5,000 which will be recovered in four year. The cost of capital is 10.5%. find out the project's net present value?

 

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M918166

Have any Question? 


Related Questions in Basic Finance

Suppose the call price is 1420 and the put price is 930 for

Suppose the call price is $14.20 and the put price is $9.30 for stock options where the exercise price is $100, the risk-free interest rate is 5 percent (continuously compounded), and the time to expiration is 1 year. Ex ...

1 a present an argument for why translation exposure is

1 .(a) Present an argument for why translation exposure is relevant to an MNC. (b) Present an argument for why translation exposure is not relevant to an MNC. 2 .Walt Disney Inc built the EuroDisney theme park in France ...

1 develop a topic of interest to you and prepare both a

1. Develop a topic of interest to you, and prepare both a structured and an unstructured interview. Collect data from your classmates, and develop a method for coding the findings. 2. Create a sampling frame, and collect ...

Selecting a bank veronica plans to open a checking account

Selecting a Bank. Veronica plans to open a checking account with her $1,200 tax refund check. She believes she can maintain a $500 minimum balance. Also, she estimates that she will write 10 checks per month and will use ...

1 show that when you apply node splitting to a nonreducible

1. Show that when you apply node splitting to a nonreducible ow graph, and then perform T1-T2 reduction on the resulting split graph, you wind up with strictly fewer nodes than you started with. 2. What happens if you ap ...

The alpha company has issued a total of 15000000 shares of

The Alpha Company has issued a total of 15,000,000 shares of common stock at par(its value to the firm is $15,000,000. The dividend yield is 7%. The company also has $5,000,000 of bonds(also sold at par) with a coupon ra ...

1 you are trying to value zombie games inc a company

1. You are trying to value Zombie Games Inc,, a company that manufactures games for the major game systems. You have been provided the following information: · The firm generated $ 30 million as operating profit (EBIT) i ...

1 describe the services and characteristics that are of

1. Describe the services and characteristics that are of prime importance to you in a financial institution. 2. Which of the financial institutions you evaluated is most optimal for your needs? Why? 3. Advise the Sampson ...

Write a 600 -word paper in your paper include the

Write a 600 -word paper. In your paper include the following: Explain the capital structure of Ford Motors Company. Do they rely more heavily on debt or equity? What are their structure weights (%'s)? How does this struc ...

Focus on analysis yum brands inclearning objective 4

Focus on Analysis | Yum! Brands, Inc. (Learning Objective 4: Analyze f inancial statements) Refer to the Yum! Brands, Inc.'s financial statements in Appendix B at the end of the book. Suppose you are an investor consider ...

  • 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