Flash Company wants to purchase a new computer that will allow the company to do in-house printing rather than sub-contract the work out to a printer. The machine will cost $45,000. FLash also believes there will be substantial savings on printing costs over the five-year life of the machine.
Savings are anticipated at:
Project SS costs $52,125, its expected net cash flows are $12,000 per year for 8 years, its WACC is 12%.
What is the project's NPV?
Discounted Payback Period?
A company with $2,000,000 in operating assets is considering purchasing a machine that costs $300,000 and which is expected to reduce operating costs by $60,000 each year. The payback period for this machine in years is closest to ______?
1. "You say stock price equals the present value of future dividends? That's crazy! All the investors I know are looking for capital gains."
2.. "I like the IRR rule. I can use it to rank projects without having to specify a discount rate."
3. "I like the payback rule. As long as the minimum payback period is short, t
A project has an initial cost of $40,000, expected net cash inflows of $9,000 per year for 7 years, and a cost of capital of 11%. What is the project's NPV (Hint: Begin by constructing a time line.)
Refer to Problem 10-1. What is the Project's IRR?
Refer to Problem 10-1 What is t
You are considering the following two mutually exclusive projects. Both projects will be depreciated using straight-line depreciation to a zero book value over the life of the project. Neither project has any salvage value.