Ask Question, Ask an Expert


Ask Basic Finance Expert

Telecom Italia is considering the investment in a capital project. The initial cost in year 0 is $149,000 to be depreciated straight line over 5 years to an expected salvage value of $15,000. The firm's tax rate is 35% and it has an 11% cost of capital (the firm's discount rate, or "hurdle" rate). For this project an additional investment in working capital of $12,000 is required and it will be recovered in full at the end of the project's life. The project will generate additional revenues of $64,000 in year 1 and these revenues will grow annually at a rate of 10%. The additional expenses of the project will be $15,000 in year 1 and will grow annually at 8%. What is the NPV and the IRR of the Project? Would you accept or reject this problem? Precisely state the reason why.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M926022

Have any Question? 

Related Questions in Basic Finance

1 explain what a case study is discuss the limitations of

1. Explain what a case study is. Discuss the limitations of case studies for the study of human behavior. 2. What is systematic observation, and what techniques are used to make observations systematic? 3. What kinds of ...

1 what is business culture does national culture affect

1. What is business culture? Does national culture affect business culture? Discuss some implications of national culture for business culture. 2. Discuss how national culture affects the business culture and the busines ...

1 suppose that a researcher finds a significant difference

1. Suppose that a researcher finds a significant difference between two treatment conditions. What additional information might be obtained by adding participant gender as a second factor? 2. Explain why it is better to ...

Ritz furniture has a contribution margin ratio of 011 if

Ritz furniture has a contribution margin ratio of 0.11. If fixed cost are $172,800 how man dollars of revenue must the company generate in order to reach the break-even point?

In a poll 210 of 1050 randomly selected adults aged 18 or

In a poll, 210 of 1050 randomly selected adults aged 18 or older stated that they believe there is too little spending on national defense. Find a 90% confidence interval for the proportion of adults aged 18 or older who ...

1 describe how and why a bonds interest rate risk is

1. Describe how and why a bond's interest rate risk is related to its maturity. 2. Explain why municipal bonds can offer lower interest rates than equally risky corporate bonds. 3. Explain why the yield to maturity on a ...

What is meant by break even drivers identify two important

What is meant by break even drivers? Identify two important drivers affecting the amount of revenues needed for ventures to break even Explain

Analysis of denver furniture corpdenver furniture corp is

Analysis of Denver Furniture Corp. Denver Furniture Corp. is nationally recognized for making high-quality products. Management is concerned that the company is not fully exploiting its brand power. Denver's production m ...

What are the three ways in which derivatives can be misused

What are the three ways in which derivatives can be misused? Contrast dollar return and percentage return. Be sure to identify which return is more useful when comparing investments? Compare and contrast options and forw ...

Question 1 when viewing the terms special returns or

Question 1. When viewing the terms "special returns" or "abnormal returns," we know this can refer to _____. the Efficient Market Hypothesis gains in excess of the market risk-adjusted average convertibles and warrants, ...

  • 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