Purchase Solution


Not what you're looking for?

Ask Custom Question

General Electric is considering the investment in a capital project. The initial cost in year 0 is $100,000 to be depreciated straight line over 5 years to an expected salvage value of $5,000. The firm?s tax rate is 35% and it has an 11% cost of capital. For this project an additional investment in working capital of $8,000 is required and it will be recovered at the end of the project?s life. The project will generate additional revenues of $45,000 in year 1 and these revenues will grow annually at a rate of 6%. The additional expenses of the project will be $15,000 in year 1 and will grow annually at 5%.
a. Prepare a table determining the after-tax net cash flows for this project for years 0 thru 5. Show all work.
b. Determine the NPV for this project. Show all work.
c. Make a recommendation to the CFO about this project. Strongly defend your recommendation.

Purchase this Solution

Solution Summary

Calculates NPV of investment in the capital project.

Purchase this Solution

Free BrainMass Quizzes
Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking