Drones-R-Fun is considering a new drone product line. The initial investment is $17,883,958, annual revenues are $7,566,755 and annual maintenance is $317,415. Assume a 10% MARR and a project life of 5 years. Using Annual Worth (AW), determine the B/C Ratio of this program. Initial Cost $17,883,958 Annual Cost $317.415 Annual Benefit $7,566,755 MARR 10% Life Time 5 years

Drones-R-Fun is considering a new drone product line. The initial investment is $17,883,958, annual revenues are $7,566,755 and annual maintenance is $317,415. Assume a 10% MARR and a project life of 5 years. Using Annual Worth (AW), determine the B/C Ratio of this program. Initial Cost $17,883,958 Annual Cost $317.415 Annual Benefit $7,566,755 MARR 10% Life Time 5 years

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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NPV and EVA A project cost $2.3 million up front and will generate cash flows in perpetuity of $220,000. The firm's cost of capital is 9%. a. Calculate the project's NPV. b. Calculate the annual EVA in a typical year. c. Calculate the overall project EVA. a. The project's NPV is $ (Round to the nearest dollar.)
We project unit sales for a new household-use laser-guided cockroach search and destroy system as follows: Year 1 2 3 4 5 NPV Unit Sales 95,500 107,500 130,500 136,500 89,500 The new system will be priced to sell at $420 each. The cockroach eradicator project will require $1,900,000 in net working capital to start, and total net working capital will rise to 15% of the change in sales. The variable cost per unit is $290, and total fixed costs are $1,400,000 per year. The equipment necessary to begin production will cost a total of $17 million. This equipment is mostly industrial machinery and thus qualifies for CCA at a rate of 20%. In five years, this equipment will actually be worth about 20% of its cost. The relevant tax rate is 35%, and the required return is 18%. Based on these preliminary estimates, what is the NPV of the project? (Enter the answer in dollars. Do not round your intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.)
Required information The following data is provided for a PPP project. To the Government $1.8 milion naw and $200,000 every 3 years To the People Benefits $90,000 per year beginning now Cost $25,000 per year Savings $115,000 per year Disbenefits Calculate the conventional benefit/cost ratios using an interest rate of 7% per year and an infinite project period. The conventional B/C ratio is
Development cost Estimated development time Pilot testing Ramp-up cost Marketing and support cost Sales and production volume Unit production cost Unit price Interest rate PROJECT SCHEDULE KIDDY DOZER Development Pilot Testing Ramp-up Marketing and Support Production and Sales Tuff Wheels also has provided the project plan shown as follows. As can be seen in the project plan, the company thinks that the product life will be three years until a new product must be created. Net present value NPV 50,000 NPV 70,000 Assume all cash flows occur at the end of each period. a. What is the net present value (discounted at 8%) of this project? Consider all costs and expected revenues. (Enter your answer In thousands of dollars. Perform all calculations using Excel. Do not round any Intermediate calculations. Round your answer to the nearest thousand.) $ (11,249,000) NPV 9% NPV 10% $800,000 $200,000 $400,000 $150,000 per year 60,000 per year 9 months YEAR 1 YEAR 2 YEAR 3 YEAR 4 Q₂ Q₂ Q3 Q Q Q₂ Q3…
7 independent project proposals from various departments of an enterprise has come. The budget allocated by the management for these projects is 600,000 TL. Current value identify the appropriate projects using the method. (I = 20% will be accepted and the first take p=0.2 for trial. ) Scrap Value (Thousand (Thousand TL) Cost Annual Smooth Useful Project TL) earnings (thousand TL) lifetime (year) 1 200 60 10 100 35 10 3 100 30 10 4 150 46 8. 250 75 10 10 6. 100 45 7 50 19 8.
(4) Evaluate the ROI.
A labor saving device system save $2.000 per year for five (5) years. It can be installed at a cost of $8,000. The rate of return on this planned investment is most nearly a. 12.36% b.i 10.36% Oc 10% Od. 9.36%
You are considering the following project. What is the NPV of the project? WACC of the project: 0.10 Revenue growth rate: 0.05 Tax rate: 0.40 Revenue for year 1: 13,000 Fixed costs for year 1: 3,000 variable costs (% of revenue): 0.30 project life: 3 years Economic life of equipment: 3 years Cost of equipment: 20,000 Salvage value of equipment: 4,000 Initial investment in net working capital: 2,000
Project A costs $10, oog to start and makes a mouth. Project cost $20,000 to start but only makes $500 month Project A $ 800 last only 20 years forever, project. B. last an interst of 15%. Project A is better. (use". FUAN" fabe.
Please give answer of this Question
Saved Cardinal Company is considering a project that would require a $2,765,000 investment in equipment with a useful life of five years. At the end of five years, the project would terminate and the equipment would be sold for its salvage value of $200,000. The company's discount rate is 12%. The project would provide net operating income each year as follows: Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses $2,861,000 1,101,000 1,760,000 $ 705,000 513,000 03:08:19 1,218,000 $ 542,000 Net operating income Required: What is the project's payback period? (Round your answer to 2 decimal places.) Project's payback period years
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