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Veseljchak [2.6K]
3 years ago
9

An airline is considering a project of replacement and upgrading of machinery that would improve efficiency. The new machinery c

osts $400 today and is expected to last for 5 years with no salvage value. Straight line depreciation will be used. Project inflows connected with the new machinery will begin in one year and are expected to be $200 each year for 5 consecutive years and project outflows will also begin in one year and are expected to be $90 each year for 5 consecutive years. The corporate tax rate is 32% and the required rate of return is 9%. Calculate the project's net present value.
Business
1 answer:
Brrunno [24]3 years ago
3 0

$-9.48

Explanation:

Net present value is the present value of after-tax cash flows from an investment less the amount invested.  

NPV can be calculated using a financial calculator  

Cash flow = (revenue - cost - depreciation) (1 - tax rate) + depreciation

Straight line depreciation expense = (Cost of asset - Salvage value) / useful life

(400 - 0) / 5 = 80

(200 - 90- 80) x (1 - 0.32)  + 80 = $100.40

Cash flow in year 0 = $-400

Cash flow each year from year 1 to 5 = $100.40

I = 9%

NPV = $-9.48

To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

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<span>The private plots were more productive
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3 years ago
If Project Repat were to acquire another firm that makes or sells similar products in similar markets, it would be an example of
SVEN [57.7K]

Answer:

b. Horizontal merger.

Explanation:

Project Repat is merging with a company that produces similar products to its own markets them in similar markets as well, this is an example of a horizontal merger that results in increased synergies between the similar firms and a greater market share opportunity.

Vertical mergers are usually not in the same industry. They would either be with the suppliers of Project Repat or customers who retail Project Repat's products.

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Hope that helps.

3 0
3 years ago
Disparate treatment could be legal if the discrimination: a. results in increased efficiency. b. is performed by a governmental
marta [7]

Answer:

The correct answer is D

Explanation:

Disparate treatment is the treatment which differing conduct or performed toward the individuals, where the differences are grounded on the individual age, colour, national origin, race, disability or religion status.

This treatment would be legal if the discrimination would be BFOQ (termed as bona fide occupational qualification), the courts must have held that in few situations that the factor like sex or religion might be BFOQ, which is important qualification for performing a job.

7 0
3 years ago
Astin Company has current assets of $82,530, total assets of $242,050, total net income of $58,240, current liabilities of $72,1
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Answer:

a. 1.14

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Answer: d. Is established to protect the corporation's creditors.

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The purpose of this is to ensure that the creditor's rights to assets in the company are protected in the event that some mishap should befall the company.

3 0
3 years ago
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