Prime Petroleum Inc. is considering an acquisition of a new production facility in order to expand production of it its main product, a gasoline additive Gas Gain. The cost of construction (first cost) is $9,000,000. The annual operating cost is projected to be $700,000. The facility will be liquidated in 24 years, resulting in a salvage value inflow of $2,000,000. Assuming MARR of 4%, compute the annual worth of the project's cash flows, and type in your answer expressed as a cost (do not include negative sign with your answer

Iron Company is considering a new equipment which will cost $75,000 today.  The equipment would be depreciated on a straight-line basis over the project's 3-year life, would have a zero-salvage value, and would require additional net operating working capital of $18,000. The annual sales revenues of the project are $100,000, and annual operating cost except depreciation is $45,000. Revenues and other operating costs are expected to be constant over the project's life. Iron Company tax rate is 35.0% and its cost of capital is 13.35 percent. What is the project's NPV, what the project's MIRR?   (MUST show and explain all steps)- Please and thank you!

Larson Manufacturing is considering purchasing a new injection-molding machine for $250,000to expand its production capacity. It will cost anadditional $20,000 to do the site preparation. Withthe new injection-molding machine installed, Larson Manufacturing expects to increase its revenueby $90,000. The machine will be used for five years,with an expected salvage value of $75,000. At aninterest rate of 12%, would the purchase of the injection-molding machine be justified?

A company is considering a new 6-year project that will have annual sales of $234,000 and costs of $146,000. The project will require fixed assets of $265,000, which will be depreciated on a 5-year MACRS schedule. The annual depreciation percentages are 20.00 percent, 32.00 percent, 19.20 percent, 11.52 percent, 11.52 percent, and 5.76 percent, respectively. The company has a tax rate of 34 percent. What is the operating cash flow for Year 2? a. 68460 b. 86912 c. 58752 d. 73097 e. 75379

Clapton Corporation is considering an investment in new equipment costing $750,000. The equipment will be depreciated on a straight-line basis over an eight-year life and is expected to have a salvage value of $80,000. The equipment is expected to generate net cash flows of $120,000 for each of the first four years and $80,000 for each of the last four years. What is the accounting rate of return associated with the equipment investment?

Carper Company is considering a capital investment of $390,000 in additional productive facilities. The new machinery is expected to have useful life of 6 years with no salvage value. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $20,000 and $85,000, respectively. Carper has an 8% cost of capital rate, which is the required rate of return on the investment. Instructions (Round to two decimals.) a. Compute (1) the cash payback period and (2) the annual rate of return on the proposed capital expenditure. b. Using the discounted cash flow technique, compute the net present value. c. Carper was presented with a second capital investment that provided similar production facilities as the first one. This investment cost $400,000, had a useful life of 7 years with a salvage value of $15,000: Depreciation is by the straight-line method. During the life of the investment, annual net income and net…

Vilas Company is considering a capital investment of $202,400 in additional productive facilities. The new machinery is expected to have a useful life of 5 years with no salvage value. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $11,638 and $46,000, respectively. Vilas has a 12% cost of capital rate, which is the required rate of return on the investment. Click here to view the factor table. (a) Compute the cash payback period. (Round answer to 1 decimal place, e.g. 10.5.) Cash payback period Annual rate of return Compute the annual rate of return on the proposed capital expenditure. (Round answer to 2 decimal places, e.g. 10.52%.) (b) 4.4 Net present value 5.75 years Using the discounted cash flow technique, compute the net present value. (If the net present value is negative, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round answer for present…

SellFridges is estimating the terminal cash flow associated with an investment project. The proposed machine costs $100,000, has installation costs of $20,000 and will be depreciated over a five-year life. In 5 years, at the end of the project, the machine will be sold at an estimated salvage value of $20,000. Net working capital of $6,000 is also expected to be recovered in the final year of the project. The corporate tax rate is 30%. The terminal cash flow is: （The correct answer is 20,000.When calculating the book value,it has 120,000 - (5 x 24,000)=0.   Depreciation is (Purchase price-salvage value)/useful life.I think the depreciation should be (120,000-20,000)/5=20,000.Why the accumulated depreciation is 5*24,000,not 5*20,000?

Domestic

Looner Industries is currently analyzing the purchase of a new machine that costs $158,000 and requires $19,900 in installation costs. Purchase of this machine is expected to result in an increase in net working capital of $29,600 to support the expanded level of operations. The firm plans to depreciate the machine under MACRS using a​ five-year recovery period​ (see the table attached for the applicable depreciation​ percentages) and expects to sell the machine to net $10,300 before taxes at the end of its usable life. The firm is subject to a 21% tax rate   c.  Assuming a​ five-year usable​ life, calculate the terminal cash flow if the machine were sold to net​ (1) $8,895 or​ (2) $169,900 ​(before taxes) at the end of five years.   d. Discuss the effect of sale price on terminal cash flow using your findings in part c.