A preferred stock pays an annual dividend of $6 75 and sells for $58 60 a share What is the rate of return on this security Thornley Machines is considering a 3 year project with an initial cost of $840,000 The project will not directly produce any sales but will reduce operating costs by $435,000 a year The equipment is depreciated straight line to a zero book value over the life of the project At the end of the project the equipment will be sold for an estimated $90,000 The tax rate is 34 percent The project will require $22,000 in extra inventory for spare parts and accessories Should this project be implemented if Thornley's requires a rate of return of 10 percent Why or why not A project will require $498,000 for fixed assets and $58,000 for net working capital The fixed assets will be depreciated straight line to a zero book value over the five year life of the project At the end of the project, the fixed assets will be worthless The net working capital returns to its original level at the end of the project The project is expected to generate annual sales of $875,000 and costs of $640,000 The tax rate is 35 percent and the required rate of return is 15 percent What is the amount of the annual operating cash flow PGH, Inc is considering a new six year expansion project that requires an initial fixed asset investment of $3 102 million The fixed asset will be depreciated straight line to zero over its six year tax life, after which time it will be worthless The project is estimated to generate $1,987,000 in annual sales, with costs of $1,102,200 The tax rate is 35 percent and the required return on the project is 16 percent What is the net present value for this project A 4 year project has an initial asset investment of $306,600, and initial net working capital investment of $29,200, and an annual operating cash flow of $46,720 The fixed asset is fully depreciated over the life of the project and has no salvage value The net working capital will be recovered when the project ends The required return is 15 percent What is the project's equivalent annual cost, or EAC

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Posted on May 27, 2024

A preferred stock pays an annual dividend of $6.75 and sells for $58.60 a share. What is the rate of return on this security?

Thornley Machines is considering a 3-year project with an initial cost of $840,000. The project will not directly produce any sales but will reduce operating costs by $435,000 a year. The equipment is depreciated straight-line to a zero book value over the life of the project. At the end of the project the equipment will be sold for an estimated $90,000. The tax rate is 34 percent. The project will require $22,000 in extra inventory for spare parts and accessories. Should this project be implemented if Thornley's requires a rate of return of 10 percent? Why or why not?

A project will require $498,000 for fixed assets and $58,000 for net working capital. The fixed assets will be depreciated straight-line to a zero book value over the five-year life of the project. At the end of the project, the fixed assets will be worthless. The net working capital returns to its original level at the end of the project. The project is expected to generate annual sales of $875,000 and costs of $640,000. The tax rate is 35 percent and the required rate of return is 15 percent. What is the amount of the annual operating cash flow?

PGH, Inc. is considering a new six-year expansion project that requires an initial fixed asset investment of $3.102 million. The fixed asset will be depreciated straight-line to zero over its six-year tax life, after which time it will be worthless. The project is estimated to generate $1,987,000 in annual sales, with costs of $1,102,200. The tax rate is 35 percent and the required return on the project is 16 percent. What is the net present value for this project?

A 4-year project has an initial asset investment of $306,600, and initial net working capital investment of $29,200, and an annual operating cash flow of -$46,720. The fixed asset is fully depreciated over the life of the project and has no salvage value. The net working capital will be recovered when the project ends. The required return is 15 percent. What is the project's equivalent annual cost, or EAC?