A project costs $80,000 and will be depreciated straight-lin…
A project costs $80,000 and will be depreciated straight-line to zero over its 4 year life. The project generates annual OCF of $22,000 and the fixed assets will be sold for $9,000 at the termination of the project. If the firm has a tax rate of 35% and a required return of 5%, what is the NPV?
Read DetailsGiven the following information and assuming straight-line d…
Given the following information and assuming straight-line depreciation to zero, what is the profitability index for this project? Initial investment = $75,000; life = 5 years; operating cash flow = $21,000 per year; salvage value = $10,000 in year 5; tax rate = 35%; discount rate = 10%.
Read DetailsThe following two bonds (A and B) make semi-annual payments….
The following two bonds (A and B) make semi-annual payments. They are both identical, except for the coupon rate. What is the price of bond B? Note: find bond A’s missing yield to maturity (YTM) first, use it for bond B’s YTM, then find bond B’s price. All variables have to be entered in half-year terms! Do not round you intermediate answers. Bond A Bond B Face Value $1,000 $1,000 Coupon Rate as APR 7% 5% Years to maturity 30 30 Price $1,200.00 ?
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