Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

same the total PVT (13 marks) he projets are perfectly dibin, how would this change the total NPV? (12 mat Question 126 marka 45 minutes

image text in transcribed

same the total PVT (13 marks) he projets are perfectly dibin, how would this change the total NPV? (12 mat Question 126 marka 45 minutes Unique engineering considering investing NS 500 000 in a bolt and nut producing machine with a lifespan of five years. Installation costs amount to NS 90 000. The machine would be deprecated on a straight-line basis and would have salvage value of Na 15000. The machine can producn 15,000 bolts and nuts per year throughout its working it. Currently a bolt and nut command a market price of NS 20, while the raw materials used to produce it costs N$10 per un Bolts and nuts and raw material prices are both expected to increase with inflation which is projected to be 5% per year. Unique engineering has determined that a real discount rate of 6% per year is appropriate The tax rate is 35% MARKS 1 REQUIRED: 21 Calculate the flation adjusted tale of return 2.2 Ignoring the decimals in 21 above calculate the represent value of the project Advice the management on 2.2 above TOTAL MARKS 23 1 25

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

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

Step: 2

blur-text-image

Step: 3

blur-text-image

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

Cost Of Capital Applications And Examples

Authors: Shannon P. Pratt, Roger J. Grabowski, Richard A. Brealey

5th Edition

1118555805, 9781118555804

More Books

Students also viewed these Finance questions

Question

How does standard costing improve the control function?

Answered: 1 week ago

Question

What committees does the person serve on?

Answered: 1 week ago

Question

What is globalization? What is the Bretton Woods system?

Answered: 1 week ago

Question

2. Should a disciplinary system be established at Carter Cleaning?

Answered: 1 week ago