Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Financial Accounting Expert

Task1. You have been appointed as a consultant for Pristine Urban-Tech Zither, Inc. (PUTZ), manufacturers of the fine zithers. The market for zithers is growing rapidly. The company purchased some land three years ago for $1.4 million in expectancy of using it as a toxic waste dump site however has recently appointed another company to handle all toxic materials. Based on a recent appraisal, the company thinks it could sell the land for $1.5 million on an after-tax basis. In four years, the land could be sold for $1.6 million after taxes. The company also appointed a marketing firm to analyze the zither market, at a cost of $125,000. An excerpt of marketing report is as follows:

The zither industry will have a torque expansion in the upcoming four years. With the brand name recognition that PUTZ brings to bear, we feel that the company will be capable to sell 3,800, 4,700, 5,300, and 4,200 units each year for the next four years, correspondingly. Yet again, capitalizing on the name recognition of PUTZ, we feel that a premium price of $650 can be charged for each zither. Because zithers appear to be a fad, we feel at the end of the four-year period, sales must be discontinued.

PUTZ believes which fixed costs for project will be $425,000 per year, and variable costs are 15 percent of sales. The equipment essential for production will cost $3.5 million and will be depreciated according to a 3-year MACRS schedule. At the end of project, the equipment can be scrapped for $400,000. Net working capital of $125,000 will be required instantaneously. PUTZ has a 38 percent tax rate, and the required return on project is 13 percent. Refer to Table.

What is the NPV of project?

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M94195

Have any Question? 


Related Questions in Financial Accounting

Financial accounting multiple choice1 preparing a bank

Financial Accounting Multiple Choice 1) Preparing a bank reconciliation enables a company to ________. A) locate any errors, whether made by the bank or by the company B) make adjustments for transactions that have alrea ...

Half a page double spaced answering the 2 questions on 4

Half A Page double spaced answering the 2 questions on "4 corners COMMUNITY NURSERY INC." 1.) Discuss the financial statements...are there financial trends that show the org is meeting its mission? 2.) The analysis of th ...

Assignmentbullcomplete two problems problem 1 focuses on

Assignment • Complete two problems. Problem 1 focuses on working capital and quick ratio, and Problem 2 is a comprehensive problem in which you will bring together various financial analysis measures and interpret their ...

Accounting for contributions vary by usethe city of

Accounting for Contributions Vary by Use The City of Jamestown has agreed to acquire a new city maintenance building under a capital lease agreement. At the inception of the lease, a payment of $100,000 is to be made; ni ...

I loss contingencies entries and essayon november 24 2014

I. (Loss Contingencies: Entries and Essay) On November 24, 2014, 26 passengers on Windsor Airlines Flight No. 901 were injured upon landing when the plane skidded off the runway. Personal injury suits for damages totalin ...

Accounting discussion questionsdq1review the provisions of

ACCOUNTING DISCUSSION QUESTIONS DQ1 Review the provisions of the Sarbanes-Oxley Act of 2002 to address the accounting scandals in the late 1990s and early 2000s (Enron, WorldCom, etc.). Identify the provisions that you b ...

Final project guidelinesoverviewto be successful all

Final Project Guidelines Overview To be successful, all businesses must perform periodic assessments to determine the efficiency of operations. Whether you are an owner, a manager, or a front- line employee, at some time ...

Discussion sustainable income and ratio Discussion: Sustainable Income and Ratio Analysis

Discussion: Sustainable Income and Ratio Analysis • Describe sustainable income and the importance of sustainable income in the evaluation of the income statement. Choose at least two items or events that will affect sus ...

Truefalse1 a distribution from a corporation will be

True/False 1 A distribution from a corporation will be taxable to the recipient shareholders only to the extent of the corporation's E & P. 2 All distributions that are not dividends are a return of capital and decrease ...

Business simulation tasksassessed task 1 financial

Business Simulation Tasks Assessed Task 1: Financial Analysis The Board of directors has asked you to perform a review of the financial performance and financial position of the business based on the company's 2032 finan ...

  • 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