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matrenka [14]
3 years ago
6

Quad Enterprises is considering a new three year expansion project that requires an initial fixed asset investment of 2.32 milli

on. The fixed asset will be depreciated straight line to zero over its three year tax life, after which time it will be worthless. The project estimated to generate 1.735 million in annual sales, with costs of 650,000. The tax rate is 21 percent and the required return on the project is 12 percent. What is the project's NPV?
Business
1 answer:
butalik [34]3 years ago
6 0

Answer:

$128,787.07

Explanation:

Initial investment = $2.32 million = $2,320,000

Depreciation = investment ÷ Useful life

= $2,320,000 ÷ 3

= $773,333.33

Operating cash flows from year 1 to year 3

= [ ( Sales - Costs - Depreciation ) × (1 - tax) ] + Depreciation

= [ ( $1,735,000 - $650,000 - $773,333.33 ) × (1 - 0.21) ] + $773,333.33

= 1019549.99 ≈ 1,019,550

Thus,

NPV = Present value of cash inflows - Present value of cash outflows

Also,

Initial investment = \frac{1,019,550}{(1 + 0.12)^1} + \frac{1,019,550}{(1 + 0.12)^2} + \frac{1,019,550}{(1 + 0.12)^3} - 2,320,000

or

NPV = $128,787.07

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The relationship between Monique and Zhong start off as members of a secondary group, which is their company. When they met in a company party and eventually dated each other, they become members of a primary group, which is a couple.


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3 years ago
HOW DO U REPORT SOMEONES ACCOUNT!!! HELP
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Answer:

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A Notary Signing Agent consistently follows the practice of obtaining borrowers’ thumbprints in his or her journal, but is commi
geniusboy [140]

Answer:

the Notary Signing Agent should just complete the Signing assignment

Explanation:

In this specific scenario, the Notary Signing Agent should just complete the Signing assignment. This is mainly due to the fact that the Notary agent is commissioned in a state that does not require journal thumbprints, therefore since the borrower has all the correct paperwork requirements the Notary agent would not be breaking any laws by completing the signing assignment, even though it breaks his consistent practice.

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3 years ago
Suppose that furniture production encompasses the following stages: Stage 1: Trees are sold to lumber company. $1,000 Stage 2: L
g100num [7]

Answer:

a)

<em>The value added at each stage</em>

Stage                          Value added($)

1                                   1000

2   (2000-1000) =         1,000

3   (6,000- 2000) =      4,000

4    (10,000 - 6,000) =   4,000

b)

The amount by GDP is increased = $10,000

c) Reduce GDP

Explanation:

Gross domestic product (GDP) which is the total market value of all the final goods and services produced in a country over a given period of time. The GDP can be calculated using the value added approach.

Here the GPD figure is ascertained by summing the amount of additional value created by each factor of production at each stage of the production process of the final product.

a)

<em>The value added at each stage</em>

Stage                          Value added($)

1                                   1000

2   (2000-1000) =         1,000

3   (6,000- 2000) =      4,000

4    (10,000 - 6,000) =   4,000

b)

The amount by GDP is increased = $10,000 which is the total value added or the market value of the final goods

c)

If the lumber were imported it would be deducted from the value of export and thus reduce GDP.  Remember that GDP is the market value of all good and service produced within a given country over certain period of time .

3 0
3 years ago
Read 2 more answers
You are considering buying a company using leveraged buyout. The company is projected to have sales of 500 million each year in
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Answer:

Net income=  $33 million

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A leveraged buyout is a buyout of an entity by it's own managers/board members mostly through debt financing. Now the expected sales after the buyout is 500 million, we are asked to calculate net income only in the first year. First of all lets see what net income is. Net income is the remaining amount of income after having paid all the expenses which is mostly the residual income available for either distribution to shareholders or transfer to retained earnings.

The formula for net income is as follows:

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Let first calculate COGS & other administrative expense, depreciation and interest expenses first.

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Depreciation: 500*0.05 =25m

Interest expense for the year: 1500 * 0.08= 120m

Now lets substitute values in the formula mentioned above:

Income before taxes: 500m - 300m - 25m - 120m

Income before taxes: 55m

Income after taxes; 55m - 22m (taxes= 55*40%)

Net income=  $33 million

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