Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 05, 2024

A factory costs $270,000. You forecast that it will produce cash inflows of $75,000 in year 1, $135,000 in year 2, and $210,000 in year

A factory costs $270,000. You forecast that it will produce cash inflows of $75,000 in year 1, $135,000 in year 2, and $210,000 in year 3. The discount rate is 11%.

a. What is the value of the factory? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. Is the factory a good investment? Yes or No

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

Step: 3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Study Guide To Accompany Fundamentals Of Corporate Finance

Authors: Richard Brealey, Stewart Myers, Alan Marcus

5th Edition

0073012424, 9780073012421

More Books

Students also viewed these Finance questions

Question

★★★★★

An article in Financial Analysts Journal discusses results of a regression analysis of average price per share P on the independent variable X/k, where X/k is the contemporaneous earnings per share...

Answered: 1 week ago

Question

★★★★★

Revenue information for Mahoney Corporation is as follows: Consolidated revenue (from the income statement) $400,000 Intersegment sales and transfers 80,000 Combined revenues of all industry segments...

Answered: 1 week ago

Question

★★★★★

=+42, develop and compare the following models.

Answered: 1 week ago

Question

★★★★★

Comco Tool Corp. records depreciation annually at the end of the year. Its policy is to take a full year's depreciation on all assets that are used throughout the year and depreciation for half a...

Answered: 1 week ago

Question

★★★★★

preble company manufactures one product. it's variable manufacturing Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labour-hours...

Answered: 1 week ago

Question

★★★★★

Manufacturing cost data for Crane Company, which uses a job order cost system, are presented below. Indicate the missing amount for each letter. Assume that in all cases manufacturing overhead is...

Answered: 1 week ago

Question

★★★★★

5. Consider the language, L, using the alphabet A = {a, , y} defined by: a word w is in L if and only if the number of a's times the number of 's equals the number of y's. So yaay is in L but ayayy...

Answered: 1 week ago

Question

★★★★★

Kohler Corporation reports the following components of stockholders' equity at December 31 of the prior year. Common stock-$20 par value, 100,000 shares authorized, 50,000 shares issued and...

Answered: 1 week ago

Question

★★★★★

Assessment Instructions 1. Answer the following four questions: i. What are your career goals? ii. What are you really good at professionally? iii. What are you not good at or not interested in doing...

Answered: 1 week ago

Question

★★★★★

How does your personality align with your organisation's culture? If you are not part of a specific organisation, reflect on the outcomes of the personality and spend some time reflecting on your...

Answered: 1 week ago

Question

★★★★★

Go tohttps://paulhammant.com/2016/09/26/visualizing-the-theory-of-constraints/ Find TOC for a manufacturing production line - Click "Click to Play" 1 What is the constraint (which station) and what...

Answered: 1 week ago

Question

★★★★★

A(n) 7.5%, 20-year bond is callable in two years at a call price of $1,062. The bond is currently priced in the market at $967.48. What is the issue's current yield? The issue's current yield is %....

Answered: 1 week ago

Question

★★★★★

Which office is the central coordination point among federal, state, local, and tribal agencies and voluntary organizations for delivering recovery assistance programs?

Answered: 1 week ago

Question

★★★★★

What are the four types of assistance provided by the Disaster Housing Program?

Answered: 1 week ago

Question

★★★★★

What is covered under the Individual and Households Program?

Answered: 1 week ago

Previous Question Next Question