Mountain Frost is considering a new project with an initial cost of $230,000. The equipment will be depreciated on a straight-line basis to a zero book value over the four-year life of the project. The projected net income for each year is $20,500, $21,400, $24,600, and $17,400, respectively. What is the average accounting return?

Gateway Communications is considering a project with an initial fixed assets cost of $1.49 million that will be depreciated straight-line to a zero book value over the 9-year life of the project. At the end of the project the equipment will be sold for an estimated $246,000. The project will not change sales but will reduce operating costs by $411,000 per year. The tax rate is 21 percent and the required return is 12.1 percent. The project will require $55,000 in net working capital, which will be recouped when the project ends. What is the project's NPV? Mutiple Choice $566.919 $255.003 $329631 5318.997

Hollister & Hollister is considering a new project. The project will require $522,000 for now fixed assets, $218,000 for additional "inventory, and $39,000 for additional accounts receivable. Short-term debt is expected to increase by $165,000. The project has a 6-year life. The fixed assets will be depreciated straight-line to a zero book value over the life of the project. At the end of the project, the fixed assets can be sold for 20 percent of their original cost. The net working capital returns to its original level at the end of the project. The project is expected to generate annual sales of $875,000 with costs of $640,000. The tax rate is 34 percent and the required rate of return is 14 percent. What is the project's NPV? a. -$35.099 b. $56.901 c. $40.389 Od. -$21.424 e. $19.372 O E 11 12

Gateway Communications is considering a project with an initial fixed assets cost of $1.52 million that will be depreciated straight-line to a zero book value over the 9-year life of the project. At the end of the project the equipment will be sold for an estimated $243,000. The project will not change sales but will reduce operating costs by $405,000 per year. The tax rate is 34 percent and the required return is 11.8 percent. The project will require $53,500 in net working capital, which will be recouped when the project ends. What is the project's NPV?

In evaluating a project that costs $957,000, has a life of 13 years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 153,000 units per year. Price per unit is $44, variable cost per unit is $24, and fixed costs are $958,914 per year. The tax rate is 24 percent, and we require a return of 12 percent on this project. 1a. Calculate the accounting break-even point. b. What is the degree of operating leverage and the accounting break even point? c. Calculate the base case cash flow 2a. Calculate the NPV b. What is the sensitivity of NPV to changes in the quantity sold c.What does the answer in 2b tells about a 500unit decrease in the quantity sold (NPV drop) d. What is the sensitivity of OCF to changes in the variable cost figures. e. How much will OCF change if Variable costs decrease by $1

We are evaluating a project that costs $820,000, has a life of 7 years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 159,000 units per year. Price per unit is $43, variable cost per unit is $28, and fixed costs are $833,120 per year. The tax rate is 25 percent, and we require a return of 14 percent on this project. 1a. Calculate the accounting break-even point. Break-even point 1b. What is the degree of operating leverage at the accounting break-even point? DOL 2a. Calculate the base-case cash flow. Cash flow

We are evaluating a project that costs $853,000, has a life of 11 years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 106,000 units per year. Price per unit is $39, variable cost per unit is $24, and fixed costs are $856,412 per year. The tax rate is 22 percent, and we require a return of 15 percent on this project. Calculate the accounting break-even point. What is the degree of operating leverage at the accounting break-even point? Calculate the base-case cash flow. Calculate the NPV.

We are evaluating a project that costs $788,400, has a nine-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 75,000 units per year. Price per unit is $52, variable cost per unit is $36, and fixed costs are $750,000 per year. The tax rate is 21 percent, and we require a return of 12 percent on this project. a-1.Calculate the accounting break-even point. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) a- What is the degree of operating leverage at the accounting break-even point? (Do 2. not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) b- Calculate the base-case cash flow and NPV. (Do not round intermediate 1. calculations. Round your cash flow answer to the nearest whole number, e.g., 32. Round your NPV answer to 2 decimal places, e.g., 32.16.) b- What is the sensitivity of NPV to changes in the…

Isle Royale Solutions is considering a project that would have a eight-year life and would require a $2,904,000 investment in equipment. At the end of eight years, the project would terminate and the equipment would have no salvage value. The project would provide net operating income each year as follows (Ignore income taxes.): Use the documents provided in the instructions to determine the appropriate discount factor(s). All of the above items, except for depreciation, represent cash flows. The company's required rate of return is 11%. Compute the project's net present value. Compute the project's internal rate of return. Compute the project's simple rate of return. Compute the project's payback period. Isle Royale Solutions is considering a project that would have a eight-year life and would require a $2,904,000 investment in equipment. At the end of eight years, the project would terminate and the equipment would have no salvage value. The project would provide net operating income…

Gateway Communications is considering a project with an initial fixed assets cost of $1.63 million that will be depreciated straight-line to a zero book value over the 10-year life of the project. At the end of the project the equipment will be sold for an estimated $233,000. The project will not change sales but will reduce operating costs by $384,000 per year. The tax rate is 24 percent and the required return is 10.8 percent. The project will require $48,500 in net working capital, which will be recouped when the project ends. What is the project's NPV? Multiple Choice $399,054 $367,946 $428,850 $415,017 $351,948