A company purchased an asset for $3,750,000 that will be used in a 3-year project. The asset is in the 3-year MACRS class. The depreciation percentage each year is 33.33 percent, 44.45 percent, and 14.81 percent, respectively. What is the book value of the equipment at the end of the project?
Read DetailsBlink of an Eye Company is evaluating a 5-year project that will provide cash flows of $38,900, $78,390, $63,090, $61,140, and $44,340, respectively. The project has an initial cost of $179,840 and the required return is 8.9 percent. What is the project’s NPV?
Read DetailsAlt’s is contemplating the purchase of a new $271,000 computer-based order entry system. The system will be depreciated straight-line to zero over the system’s five-year life. The system will be worthless at the end of five years. The company will save $108,400 before taxes per year in order processing costs and will reduce its net working capital by $10,000 immediately. The net working capital will return to its original level when the project ends. The tax rate is 21 percent. What is the internal rate of return for this project?
Read DetailsA project with an initial cost of $30,400 is expected to provide cash flows of $10,500, $11,500, $14,600, and $9,100 over the next four years, respectively. If the required return is 8.9 percent, what is the project’s profitability index?
Read DetailsMountain Frost is considering a new project with an initial cost of $247,000. The equipment will be depreciated on a straight-line basis to a zero book value over the four-year life of the project. The projected net income for each year is $24,300,$21,300, $27,400, and $18,700, respectively. What is the average accounting return?
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