Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

tons of steel annually for a government contract to supply the City of Atlante with 26,000 need an initial $4,500,000 in frastructure development. You have

image text in transcribed

tons of steel annually for a government contract to supply the City of Atlante with 26,000 need an initial \$4,500,000 in frastructure development. You have estimated that your firm will for five years. The an $400,000 investment in the new machinery to get started; the project will list per ton; accoun. The annual fixed costs will be $515,000, and that variable costs shoukd be $295 year project life. At will depreciate the initial asset investment straight-line to zero over the 5 selling price of the eque end five years, the equipment will be dismantled, and the estimined selling price of the equipment is $275,000 after dismantling costs. The City of Atlanta will pay your firm a selling price of $385 per ton. The project will increase the firm's working capital needs by $400,000, recovered when 10. Suppose you believe that the projections for the selling price, and the fixed and variable costs are accurate only to within +/4%, what is the NPV in the worst-case scenario for this project? a. $2,189,899.01 b. $2,170,694.86 c. $982,153.36 d. $1,077,885.59 c. None of the above

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

The Wall Street Journal Complete Personal Finance Guidebook

Authors: Jeff D. Opdyke

1st Edition

030733600X, 978-0274804573

More Books

Students also viewed these Finance questions