Input area:Installation costPretax salvage valueOperating cost per yearInitial NWCTax rateDiscount rateOutput area:Aftertax salvage valueYear 1 OCFYear 2-5 OCFYear 5 net cash flowNPVEA SA SA GA$385,000$60,000$135,000$35,00021%10%SA SA SA A$47,400$187,500$106,650$189,050

1. Calculate the after-tax salvage value:After-tax salvage value = Pretax salvage value times (1 -…

Answered: Input area: Installation cost Pretax…

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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Alpha Bridge Project SUMMARY OF BRIDGE REPAIR COSTS Year Activity Cost GH¢ 2005 Inspection and top chord repairs 44,800 2007 Inspection and erosion protection 19,800 2009 Inspection 1,800 2011 Inspection and misc. steel repairs 31,800 2013 Inspection 1,800 2015 Inspection 1,800 2017 Inspection and repair abutments 65,000 2019 Inspection 1,800 Calculate the present value of the costs for the above project cash flow with a discounting rate of 5%
Compute the project cost. Gross income 1,000,000 Life of project Operating cost Rate of project 500,000 5 years 20% Benefit ratio 1.08 O a. P1,384,543.00 O b. P1,348,543.00 O c. P1,384,534.00 O d. P1,384,453.00
Estimated sales Sales Price per can Cost per can Estimated life Fixed costs Tax rate Initial equipment cost Initial equipment cost will be linearly depreciated over 4 year life with $10,000 salvage value Investment in NWC 50,000 cans $6.00 $3.00 4 years $10,000/year $100,050 $196,500 $116,000 $153,200 $90,000 Cost of capital What is the operating cash flow? $20,000 20% 10%
ic Yo NS io cer ist bun ngs nnée Current Attempt in Progress Blossom Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $905,000, and project B's cost is $1,247,300. Cash flows from both projects are given in the following table. Year 1 2 3 4 Project A $86,212 313,562 427,594 285,552 Project B $586,212 413,277 231,199 What are their discounted payback periods? (Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project, enter 0.00 for the answer.) Discounted payback period of project A Discounted payback period of project B will he accepted with a discount rate of 8 percent? átv zoom
Consider the following facts and do not consider the effect of income taxes: Initial cost of equipment Estimated life Salvage value Annual cash inflows Estimated cost of capital $45,000 5 years $5,000 $63,300. O $14,890. $59,895. O $18,319. $15,000 The net present value of the equipment is: 8%
10. You see that Big G Appliances is selling all appliances at 25% off the regular selling price. You purchase a garbage disposal which regularly sells for $159.00, a mixer which regularly sells for $189.50, and a freezer which regularly sells for $429.50. What is the total discount on your purchases?
Question Six: Two alternatives A and B are evaluated to select the most beneficial one. The details of them are shown in Figure (3). Figure (3) Alternatives Investments Useful life (years) Annual disbursements Annual revenues Salvage values Present Worth A B $60,000 $75,000 10 5 $25,000 $35,000 $45,000 $60,000 $5,000 $10,000 - $42,847 - $20,625
A1
How do you calculate net investment in working capital, net cash flows, present value of net cash flows, and NPV? WACC is 10.10%
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Initial Equipment $65,000 Project Life 3 Years Sales $55,000 Variable Costs $25,000 Fixed Costs $ 10,000 Tax rate 26% Cost of Capital 10% Ending Book Value $10,000 Sales Price at Year 3 $5,000 Net Working Capital $10,000 CALCULATE THE INITIAL COSTS, CALCULATE THE OPERATING CASH FLOW, CALCULATE THE TERMINAL NON OPERATING CASH FLOW, CALCULATE THE NPV. please show your work and formulus for the answers

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