55) Jasper Metals is considering installing a new molding machine which is expected to produce operating...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
55) Jasper Metals is considering installing a new molding machine which is expected to produce operating cash flows of $56,000 per year for 7 years. At the beginning of the project, inventory will decrease by $16,800, accounts receivables will increase by $21,400, and accounts payable will increase by $15,300. At the end of the project, net working capital will return to the level it was prior to undertaking the new project. The initial cost of the molding machine is $252,000. The equipment will be depreciated straight-line to a zero book value over the life of the project. The equipment will be salvaged at the end of the project creating an aftertax cash flow of $50,000. What is the net present value of this project given a required return of 10.1 percent? A) $50,143 B) $60,963 C) $48,281 D) $57,974 E) $50,475 55) Jasper Metals is considering installing a new molding machine which is expected to produce operating cash flows of $56,000 per year for 7 years. At the beginning of the project, inventory will decrease by $16,800, accounts receivables will increase by $21,400, and accounts payable will increase by $15,300. At the end of the project, net working capital will return to the level it was prior to undertaking the new project. The initial cost of the molding machine is $252,000. The equipment will be depreciated straight-line to a zero book value over the life of the project. The equipment will be salvaged at the end of the project creating an aftertax cash flow of $50,000. What is the net present value of this project given a required return of 10.1 percent? A) $50,143 B) $60,963 C) $48,281 D) $57,974 E) $50,475
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
Show the income statement, cash flow statement and balance sheet of the company at 31/12/2020 if: 1. The company start its operations on June 1st, 2020. Over the period, it sells 50 laptop for $400....
-
Briefly describe some of the similarities and differences between U.S. GAAP and iGAAP with respect to the accounting for pensions.
-
To increase team cohesiveness, one would ____________. (a) make the group bigger (b) increase membership diversity (c) isolate the group from others (d) relax performance pressures
-
In analyzing a transaction, can a transaction only affect one side of the basic accounting equation? If so, give an example. LO12
-
MSK Construction Company contracted to construct a factory building for $525,000. Construction started during 2019 and was completed in 2020. Information relating to the contract follows:...
-
Find f'(x) for f (r) = secSx Select one: O a. S'(x) = 8secorcot8x Ob. f(x) = 8secrtant O c. f(x) = -secBrian& O d. S'(x) = 8secortan8x Oe. f(x) = -8sec8xcot8x Which of the following are indeterminate...
-
Jacob, Inc. had the following balances and transactions during 2025: Beginning Merchandise Inventory March 10 11 units at $93 Sold 9 units June 10 October 30 Purchased 22 units at $90 Sold 17 units...
-
Diana, the CFO of JumpStart Corporation, is seeking your expertise to create a pro-forma income statement for the firm, projecting its financials for the year ending December 2024. She has requested...
-
Help please Kye Dewberry What are two questions you should be asking when assessing existing costs and resources? AABI Financial indicators: Non-financial indicators: GO PG
-
4 Materiality is a factor in deciding whether a misstatement will affect the type of opinion to render. Provide the three (3) level of materiality Question 5 Provide the principle of the code of...
-
In 2017, an increase in the cases of Carbon Monoxide poisoning was observed after Hurricane Irma made landfall in Florida. The number of cases per county in the state of Florida was gathered, and it...
-
Describe common mistakes mentors or coaches make when working with a mentee. Discuss alternative techniques that would lead to an improved mentor-mentee relationship, and achievement of agreed-upon...
-
Do some research on a specific product like the iphone or vehicles, or grocery/produce goods, drones and chart out the product diagram below. Explain how you would metric the performance outcomes...
-
Diamond Walker sells homemade knit scarves for $25 each at local craft shows. Her contribution margin ratio is 60%. Currently, the craft show entrance fees cost Diamond $1,500 per year. The craft...
-
Open systems theory suggests that the external environment affects a companys ability to function. Identify any similarities between the contingency approach and open systems theory.
-
The contingency approach suggests that a firm will be more successful when what occurs?
-
If a nepotism policy were necessary, how could Syd make certain that it would not have negative effects on the organization?
Study smarter with the SolutionInn App