Garrison appliances is considering expanding its, Ask an Expert

Finance

Garrison Appliances is considering expanding its international presence. The company believes it can sell more of its product if it has a production facility located oversees. Estimates concerning two locations are as follows:

Mumbai:

Initial Cash Outlay: $5,00,000
Useful Life: 20 Years
Net Cash inflow excluding depreciation: $1,100,000
Cost of Capital: 9%
Tax Rate 40%

Bangalore:

Initial Cash Outlay: $2,800,000
Useful Life: 20 Years
Net Cash Inflow excluding depreciation: $860,000
Cost of Capital: 9%
Tax Rate: 40%

Determine the following for each Location: 1. average rate of return on investment 2. payback period 3. net present value 4. profitability index 5. internal rate of return. 6.Should the company invest in either location...why or why not?

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91000258

Have any Question?Write your Review or question?

Related Questions in Basic Finance

Suppose your firm is considering investing in a project

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 10 percent, and that the maximum allowable payback and discounte ...

Consider three investors who need to partially liquidate

Consider three investors who need to partially liquidate investments to raise cash. In this case, all investments have been held for 3 or more years. Investor A waited for a $1,500 qualified dividend distribution from he ...

How does the bid-ask spread affect market orders vs limit

How does the bid-ask spread affect market orders vs limit orders? (Does it related to a narrow/wide spread?)

What are the effects of coupon rate to the sensitivity of a

What are the effects of coupon rate to the sensitivity of a bond price and to changes in interest rates?

1 i a stock will pay constant dividends of 9 every year its

1) i) A stock will pay constant dividends of $9 every year. Its required rate of return (a.k.a., cost of capital, discount rate) is 17%. What is the value of the stock? Round to the penny. ii) A stock just paid a dividen ...

Express surgerys preferred stock which has a par value

Express Surgery's preferred stock, which has a par value equal to $110 per share, pays an annual dividend equal to 9% of the par value. If investors require a 15% return, what's the stock's market value?

What are the different types of survey research error and

What are the different types of survey research error and describe an example of each.

Bond a is a 1-year zero-coupon bond bond b is a 2-year

Bond A is a 1-year zero-coupon bond. Bond B is a 2-year zero-coupon bond. Bond C is a 2-year 10% coupon bond that pays annually. The yield to maturity (annually compounded) on bond A is 10%, and the price of bond B is $8 ...

Sweatt strengths weaknesses excellence action threats and

SWEATT (Strengths, Weaknesses, Excellence, Action, Threats and Team) This model was developed by Dr. Russel Robertson to effectively implement culture change in an organization. How can the SWEATT model help organization ...

Question during 2014 its first year of operations as a

Question: During 2014, its first year of operations as a delivery service, Loonie Corp. entered into the following transactions. 1. Issued shares of common stock to investors in exchange for $80,000 in cash. 2. Borrowed ...

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

Recent Questions

Ask Basic Finance Expert