Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem: Mills Mining is considering an expansion project. The proposed project has the following features:

[A] The project has an initial cost of dollar 500,000 this is also the price which can be depreciated using the given depreciation schedule:

Year 

Depreciation Rate

1

33%

2

45

3

15

4

7

[A] If the project is undertaken, at t = 0 the company will need to increase its inventories by dollar 50,000, and its accounts payable will rise by dollar 10,000. This net operating working capital will be recovered at the end of the project's life [t = 4]. 
[B] If the project is undertaken, the company will realize an additional dollar 600,000 in sales over each of the next four years [t = 1, 2, 3, 4]. The company's operating cost [not including depreciation] will equal dollar 400,000 a year. 
[C] Tax rate is 40%. 
[D] At t = 4, the project's economic life is complete, but it will have a salvage value of $50,000. 
[E] WACC = 10.5%.

find out the project's net present value (NPV)?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M918193

Have any Question? 


Related Questions in Basic Finance

Suppose you borrow 300000 at 7 for 30 years with 0 points

Suppose you borrow $300,000 at 7% for 30 years with 0 points. Suppose also that the mortgage note includes a prepayment penalty of 1% of the mortgage balance if the mortgage is prepaid within 10 years. What is the effect ...

Us has experienced continuous current account deficits

US has experienced continuous current account deficits since the early 1980s. What do you think are the main causes for the deficits? What would be the consequences of continuous U.S current account deficits?

Under the bretton woods system the us dollar was the

Under the Bretton Woods system, the U.S. dollar was the official reserve asset. How did this affect the U.S. balance of payments on current and capital accounts? Could the United States experience large balance of paymen ...

Assume the readings on thermometers are normally

Assume the readings on thermometers are normally distributed with a mean of 0 degrees °C and a standard deviation of 1.00 degrees °C. Find the probability that a randomly selected thermometer reads between -1.38 and -0.0 ...

Last year hamdi corp had sales of 500000 operating costs of

Last year Hamdi Corp. had sales of $500,000, operating costs of $450,000, and year-end assets of $350,000. The debt-to-total-assets ratio was 17%, the interest rate on the debt was 7.5%, and the firm's tax rate was 35%. ...

1 assume that you are mr hegarty the ceo of mebel-doran

1) Assume that you are Mr. Hegarty, the CEO of Mebel-Doran. What will you do now? What avenues are open to you? Is Mebel-Doran ethically responsible for anything in this transaction? Should they be legally responsible? S ...

Some may state that we worry far too much about the format

Some may state that we worry far too much about the format and the correctness of business documents. Argue for the importance of making sure all business writings (presentations, memos, emails, letters, reports, etc...) ...

Nicole corporations year-end 2009 balance sheet lists

Nicole Corporation's year-end 2009 balance sheet lists current assets of $756,000, fixed assets of $606,000, current liabilities of $539,000, and long-term debt of $694,000. What is Nicole's total stockholders' equity?

Impact of money supply growth explain why an increase in

Impact of Money Supply Growth Explain why an increase in the money supply can affect interest rates in different ways. Include the potential impact of the money supply on the supply of and the demand for loanable funds w ...

Why is the npv method for budgeting accepted as the most

Why is the NPV method for budgeting accepted as the most valuable budgeting tool? If you were not allowed to use NPV for a budget you were developing, what other method(s) would you use? Explain your choices.

  • 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