University Of North Texas Operations And Supply Chain Management Assignment Help - Corporate Finance

Question - If I had a net investment of $40,000 with cash inflows amounting to $20,000 per year for
three years (years 1-3) what would be the discounted payback on the project if the cost of
capital is 10%? If I had a cutoff of two years in discounted payback, would I accept this
project? (Points : 3)
1.35 years; accept
1.95 years; reject
2.35 years; reject
exactly 3 years; reject

8. Time Turman, Inc., is considering a drill press costing $30,000 and is expected to have a
10 year life. The drill press will be depreciated on a straight-line basis over 10 years to a
zero estimated salvage value. This machine is expected to reduce the firm's cash operating
costs by $4,500 per year. If the firm is in the 40 percent marginal tax bracket, deter ...Read More mine the
annual net cash flows generated by the drill press. (Points : 3)
$4,500
$900
$5,700
$3,900

9. What is the NPV of an investment if the initial outlay is $50,000 and the cash inflows
are:

Year CF
1 $19,048
2 $18,141
3 $17,277
4 $16,454

Assume a cost of capital of exactly 9.524%. (Points : 3)
$7,100
$23,000
$4,500
$6,432

10. Consider a capital expenditure project with an expected 10-year economic life and
forecasted revenues equal to $40,000 per year; cash expenses are estimated to be $29,000
per year. The cost of the project equipment is $23,000, and the equipment's estimated
salvage value at the end of the project is $9000.The equipment's $23,000 cost will be
depreciated using MACRS depreciation (7-year asset). The project requires a $7,000
working capital investment in year 0 and another $5,000 in year 5. The company's marginal
tax rate is 40%. Calculate the expected net cash flow in year 10 of the project. (Points : 3)
$32,000
$27,000

$24,000
$18,000 ...Read Less

Solution Preview - No Solution Preview Available

Original Question Documents

N/A