Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

Colin's Haberdashery Products is considering a project that would have an initial cost of $285,000 and a 4-year life. The project's assets will be depreciated using straight-line depreciation to a zero book value over the life of the project. Projected cash flow from the project is forecast at $83,650, $92,850, $94,350 and $93,250 respectively for the next 4 years. Projected annual net income from the project is forecast at $12,400, $21,600, $23,100 and $22,000 for the next 4 years, respectively. What is the average accounting return?

6.94 percent
13.88 percent
15.66 percent
27.75 percent
31.31 percent

Symbiotic Accounting Products is considering launching a project with an initial cost of $7,800. What is the payback period for this project if the cash inflows are $1,100, $1,640, $3,800 and $4,500 a year over the next four years respectively?

3.21 years
3.28 years
3.36 years
4.21 years
4.29 years

The Mitre Box Company is considering a project with an initial cost of $35,000 and future cash inflows of $20,000, $15,000, $10,000 and $5,000 over the next four years respectively. If the company requires a 9.5 percent rate of return, should the company accept the project?

No; the NPV is negative.
Yes; the NPV is $3,874.
Yes; the NPV is $5,207.
Yes; the NPV is $6,869.
Cannot be determined from the information given.

Campbell's Coffee Shop is trying to analyze a project that requires a $135,000 investment in fixed assets. When the project ends, those assets are expected to have an after-tax salvage value of $35,000. How should Campbell handle the $35,000 salvage value when computing the net present value of the project?

do not include in the net present value computation
reduce the cash outflow at time zero
add to cash inflow in the final year of the project
add to cash inflow in the year following the final year of the project
prorate and add to cash inflow over the life of the project

A company purchased a piece of milling equipment 4 years ago for $149,000 and at the beginning of last year spent $11,000 to update the equipment with the latest technology. The company no longer uses this equipment in its current operations and has rec'd an offer of $110,000 from a firm to purchase it. The company is debating whether to sell it or expand operations so that the equipment can be used. When evaluating the expansion option, what value, if any should the firm assign to this equipment as an initial cost of the project?
$0
$21,000
$89,000
$110,000
$160,000

A company is considering a new 4 year expansion project that requires an initial investment of $3 million. The fixed asset will be depreciated straight line to zero over its 4 year tax life after which time it will be sold. Assume it will be sold for $231,000, it's estimated market value at the end of 4 years. The project requires an initial investment in net working capital of $330,000 all of which will be recovered at the end of the project. The project is estimate to generate $2,640,000 in annual sales with costs of $1,056.000. The tax rate is 30 percent and the required return for the project is 11.5 percent. What is the net present value for this project?

$1,082,378
$1,127, 215
$1,333, 800
$1,825,500
$1,202, 965

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M924998

Have any Question? 


Related Questions in Basic Finance

1 list in order the major sections that all research papers

1. List in order the major sections that all research papers must have. 2. What is the purpose of the introduction of a paper? 3. When presenting the results of statistical analyses, what information should be presented? ...

Analyze1foreign stockasamsung electronics ltd korean stock

Analyze: 1. Foreign Stock a. Samsung Electronics LTD. (Korean Stock Exchange) b. Focus on phone explosions *Monitor their performance throughout the semester (begin: 9/15/2016, end: 12/2/2016), reflecting on the performa ...

1 discuss how the planningcoordination and operation flow

1. Discuss how the planning/coordination and operation flow differs for MTO and MTS firms. 2. Compare and contrast the role of planning/coordination and operations in improving firm competitiveness. 3. Compare and contra ...

1 describe the actions you will take ie increasing

1. Describe the actions you will take (i.e., increasing deductions or reducing gross income) to achieve tax savings in the present year. 2. Detail the means by which you will reduce your tax liability in the future (i.e. ...

Some time ago julie purchased eleven acres of land costing

Some time ago, Julie purchased eleven acres of land costing $13,990. Today, that land is valued at $33,528. How long has she owned this land if the price of the land has been increasing at 6 percent per year?

1 what is counterparty risk what counterparty risk is

1. What is counterparty risk? What counterparty risk is involved with forward contracts? Why are investors and firms that enter forward contracts willing to accept counterparty risk? 2. What are the key differences betwe ...

How does a conversion provision on a debt obligation

How does a conversion provision on a debt obligation provide an option to the investor? If the yield on a Treasury security is 3% and that of a similar-maturity municipal bond is 2.5%, what is the muni-Treasury yield rat ...

1 how is preferred stock different from common stock2 what

1. How is preferred stock different from common stock? 2. What is a prospectus? 3. Describe the role of the underwriting syndicate in a firm-commitment offering. 4. Why is the relationship between an investment banker an ...

Discussion questionliabilities please respond to the

Discussion Question "Liabilities" Please respond to the following: • Let's use this discussion to study bonds together. Assume the following information for a bond issue: ABC Company issues the bonds at a face value of $ ...

Describe the mil-std-1312 nas test name three generic

Describe the MIL-STD-1312 (NAS) test ? Name three generic ways to prevent or at least minimize self-loosening ? Define prevailing torque ? A proper length-to-diameter ratio for the bolt can reduce or eliminate self-loose ...

  • 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