Question
1.). What is the NPV of the following cash flows if the required rate of return is 0.09? Year 0 1 2 3 4 CF
1.). What is the NPV of the following cash flows if the required rate of return is 0.09?
Year 0 1 2 3 4
CF -7500 2600 3600 4700 3900
Enter the answer with 2 decimals (e.g. 1000.23).
2.).Winnebagel Corp. currently sells 37700 motor homes per year at $46700 each, and 18500 luxury motor coaches per year at $110200 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 23900 of these campers per year at $11900 each. An independent consultant has determined that if Winnebagel introduces the new campers, it should boost the sales of its existing motor homes by 5300 units per year, and reduce the sales of its motor coaches by 1900 units per year. What is the amount to use as the annual sales figure when evaluating this project?
3.) Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2263000. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will be worthless. The project is estimated to generate $2000000 in annual sales, with costs of $1530000. If the tax rate is 0.40 , what is the OCF for this project?
4.).An asset used in a 4-year project falls in the 5-year MACRS class (refer to MACRS table on page 277),for tax purposes. The asset has an acquisition cost of $22587000 and will be sold for $7872000 at the end of the project. If the tax rate is 0.34, what is the aftertax salvage value of the asset ?
5.).Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land 10 years ago for $3917000 in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $3728000. An engineer was hired to study the land at a cost of $836000, and her conclusion was that the land can support the new manufacturing facility. The company wants to build its new manufacturing plant on this land; the plant will cost $5422000 million to build, and the site requires $1072000 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?
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