Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

1. Sunstar Company is considering purchasing the new farm that it plans to function for 10 years. The farm will need the initial investment of $12.00 million. This investment will consist of $2.00 million for land and $10.00 million for trucks and other equipment. Land, all trucks, and all other equipment is expected to be sold at ending of 10 years at the price of $5.01 million, $2.43 million above book value. Farm is expected to create revenue of $2.01 million each year, and annual cash flow from operations equals $1.82 million. Marginal tax rate is= 35%, and suitable discount rate is 9%. Compute NPV of this investment.

2. High Mountain Vineyards is considering updating its present manual accounting system with high-end electronic system. Whereas the latest accounting system would save company money, cost of the system continues to refuse. High Mountain’s opportunity cost of capital is 15.9%, and costs and values of investments made at various times in future are as given:

year/ cost/    Value of Future Savings (at time of purchase)
0     $5,000   $7,000
1      4,200     7,000
2      3,400     7,000
3      2,600     7,000
4      1,800     7,000
5      1,000     7,000

Computethe NPV of each choice.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M914253

Have any Question? 


Related Questions in Basic Finance

As part of the financial planning process a common practice

As part of the financial planning process, a common practice in the corporate finance world is restructuring through the process of mergers and acquisitions (M&A). It seems that on a regular basis, investment bankers arr ...

1 disadvantage of high liquidity what is a disadvantage of

1. Disadvantage of High Liquidity. What is a disadvantage of maintaining a very high level of liquidity? 2. Economic Impact on Liquidity Needs. Assume that your monthly expenses will not change over the next three years, ...

A company exports 37000 products to chile nbspunder an

A company exports 37,000 products to Chile  under an import license that expires in five years. In Chile, the products are sold for the Chile peso equivalent of $45. Direct shipping costs in the United States and indirec ...

One advantage of displaying correlational data in a scatter

One advantage of displaying correlational data in a scatter plot is that you can literally see the relationship in the graph. a. In a scatter plot, what pattern of points would indicate a positive relationship between va ...

Apple inc is currently equity-financed only with a beta of

Apple Inc. is currently equity-financed only with a beta of 1.1. Its tax rate is 35%. Risk-free rate and market risk premium are both 7%. Calculate the cost of equity if Apple Inc's capital structure consists of 30% debt ...

Find two variables that you think should be either

Find two variables that you think should be either positively or negatively correlated. Measure these two variables in a sample of participants (for instance, your classmates). Calculate the Pearson correlation coefficie ...

1 although economists generally discredit mercantilism can

1. Although economists generally discredit mercantilism, can you find any examples in the popular press where politicians or business leaders use similar arguments to protect an industry? 2. Identify some products initia ...

1 describe four types of invalidity that can be found in

1. Describe four types of invalidity that can be found in experimental research designs. 2. What are extraneous and confounding variables? Which type of variable is most dangerous to the statistical conclusion validity a ...

Explain how a short call added to a protective put forms a

Explain how a short call added to a protective put forms a collar and how it changes the payoff and up-front cost? Explain the process by which the profit of a short straddle closed out prior to expiration is influenced ...

Evaluate visuals used for a presentationattend a business

Evaluate visuals used for a presentation. Attend a business meeting, a city council meeting, a student council meeting, a business conference, an executive lecture presentation, or some other event where oral presentatio ...

  • 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

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

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen