Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please help A company is considering a new line which will require an initial investment of $325,000. Free cash flows expected as a result of
please help
A company is considering a new line which will require an initial investment of $325,000. Free cash flows expected as a result of this project are shown below. At the end of the final year shown, the company plans to sell off assets no longer needed by the project. netting $20,000 after tax. The company has a 15% cost of capital (i.e., the required rate of return is 15% ). What is the internal rate of return of this proposal? \begin{tabular}{|l|l|l|l|l|l|} \hline return of this proposal? & Year 1 & Year 2 & Year 3 & Year 4 & Year 5 \\ \hline Year 0 & 80.000 & 85,000 & 90,000 & 95,000 & 100,000 \\ \hline Initiallimestiment \end{tabular} Enter your answer as a percentage rounded to two decimal places, but without the percent symbol. For example, If your answer is 90,1234%, enter 90.12 . 1 you have a negative result, enter a nesative number. Type youranswer- 1 point: A company is adding an additional machine to increase its operating capacity. The installed cost of this machine is $976,000. As utilization of the new machine ramps up, the company will see changes in revenues, operating costs, taxes, accounts receivable. inventories, accounts payable and other elements of net working capital. Free cash flows expected from adding this machine are forecasted as shown below. At the end of the final year shown, the company plans to sell the machine, netting $13,000 after tax. The cc Y Intuar uneruma!: Enter your answer as a monetary amount rounded ko four decimal places, but without the $90.1234, enter 90.1234 If you have a negative result, enter a negative number. A company is adding an additional machine to increase its operating capacity. The installed cost of this machine is $1,200,000, As utillzation of the new machine ramps up, the comparry witl see changes in revenues, operating costs, taxes, accounts receivable. inventories, accounts payable and other elements of net working capital. Free cash flows expected from adding this machine are forecasted as shown below, At the end of the final year shown, the company plans to sell the machine, netting $19,000 after tax. The company has a 10% cost of capital (i.e, the required rate of return is 10\%). What is the payback period of this proposal (measured in 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