Question
I need help with these questions, also please show work on how you got the answers pleasea and thank you :) 1. A factory costs
I need help with these questions, also please show work on how you got the answers pleasea and thank you :)
1. A factory costs $520,000.It will produce and inflow after operating costs of $160,000 in year 1, $260,000 in year 2, and $360,000 in year 3.The opportunity cost of capital is 14%.Calculate the NPV.
2. A factory cost $980,000.You reckon that it will produce an inflow after operating costs of $188,000 a year for 10 years.
a.If the opportunity cost of capital is 12% what is the net present value of the factory.
b.What will the factory be worth at the end of six years?
3. At an interest rate of 12%, the five-year discount factor is 0.567.How many dollars is $1.55 worth in five years if invested at 12%?
4.Halcyon Lines is considering the purchase of a new bulk carrier for $9.5 million.The forecasted revenues are $6.5 million a year and operating costs are $5.5 million.A Major refit costing $3.5 million will be required after both the fifth and tenth years.After 15 years, the ship is expected to be sold for scrap at $3.0 million.If the discount rate is 12%, what is the ships Net Present Value?
5. If the Present Value of $289 is $240, what is the discount factor?
6. If you invest $145 at an interest rate of 10%, how much will you have at the end of seven years?
7. A project produces a cash flow of $507 in year 1, $212 in year 2, and $872 in year 3.If the cost of capital is 13.5% what is the projects Present Value?
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