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

An investor has a cash of 10000000 at disposal he wants to

An investor has a cash of $10,000,000 at disposal. He wants to invest in a bond with $1,000 nominal value and whose dirty price is equal to 107.457%. 1. What is the number of bonds he will buy? 2. Same question if the no ...

The text web site contains world bank data on financial

The text Web site contains World Bank data on financial development. Using these data, compare bank loans as a percentage of GDP in two groups of countries: those in East Asia (8 countries) and those in sub-Saharan Afric ...

Explain how each of the following affects the short-run

Explain how each of the following affects the short-run aggregate supply curve. a. Firms and workers reduce their expectations of future inflation. b. There is a rise in current inflation. c. There is a fall in oil price ...

Jack and jill corporations year-end 2009 balance sheet

Jack and Jill Corporation's year-end 2009 balance sheet lists current assets of $259,000, fixed assets of $809,000, current liabilities of $186,000, and long-term debt of $291,000. What is Jack and Jill's total stockhold ...

Part a bogart ltd has determined the number of widgets it

Part A Bogart Ltd has determined the number of widgets it will need during the next five years as follows: 2011 50000 2012 50000 2013 52000 2014 55000 2015 55000 The equipment used to manufacture the widgets must be repl ...

The fed and commercial paper why and how did the fed

The Fed and Commercial Paper : Why and how did the Fed intervene in the commercial paper market during the credit crisis?

In excercises 17-36 assume that a randomly selected subject

In excercises 17-36, assume that a randomly selected subject is given a bone density test. Those test scores are normally distributed with a mean of 0 and a standard deviation of 1. In each case, draw a graph and find th ...

Can you explain how the cost of capital is calculated and

Can you explain how the cost of capital is calculated and how can we use that in analyzing capital projects?

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 ...

What are the net proceeds from the sale of a bond what are

What are the net proceeds from the sale of a bond? What are flotation costs, and how do they affect a bond's net proceeds? Please answer in 100-150 words.

  • 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