a) Calculate the net present value Tax is paid on profits at the end of the year

Fantastic news! We've Found the answer you've been seeking!

Question:

a) Calculate the net present value Tax is paid on profits at the end of the year in which it is earned

b) Re-calculate the NPV for RD-6 satellite tax is paid on profits one year after it is earned

RD-6 satellite
Cost of Satellite	$350 Million
Launching cost	$100 Million
Annual revenue	$105 million
Annual operating cost	$25 million
Satellite Life	15 years
Corporate Tax rate Required rate of return	30% 9.8%

Satellite is depreciated straight line down to a book value of zero over their entire useful life

Related Book For answer-question

Introduction to Corporate Finance What Companies Do

ISBN: 978-1111222284

3rd edition

Authors: John Graham, Scott Smart

See More Books

Posted Date: Oct 20, 2023 01:19 AM

See More Questions

Ques 1: What is the major complaint by firms concerning the Sarbanes-Oxley act of 2012? A. the legislative maximum allowable compensation for a CEO. B. the legal requirement to disclose project...
In general, students are expected to meet the following objectives: 1) To ascertain cost of capital for a new project by using cost of capital of existing firms operating in the same business. (2)...
The cost of a single RD-6 satellite is $350 million. A MK-8 imaging satellite carries a price tag of $300 million. Another significant factor with satellites is the cost of the launch. In particular,...
Lets assume the client in the fact pattern in this weeks discussion board did not want to purchase the mothers house (in other words, forget about only those facts) and now has been appointed as the...
Two speeding lead bullets, each of mass 5.00 g, and at temperature 20.0C, collide head-on at speeds of 500 m/s each. Assuming a perfectly inelastic collision and no loss of energy by heat to the...
A firms production function is given by the equation Q = 12L. 5 K. 5 , Where L, K, and Q are measured in thousands of units. Input prices are 36 per labor unit and 16 per capital unit. a. Create a...
(a) Complete a steady-state simulation of the vinyl-chloride process in Figure 2.6. First, create a simulation flowsheet. Assume that: Cooling water is heated from 30 to $50^{\circ} \mathrm{C}$...
SunTrust Banks owns a large block of Coca-Cola Company (Coke) common stock that it has held for many years. SunTrust indicates in a note to its financial statements that all equity securities held by...
K(s-2) (s-3) Find the jw-crossing for the negative unity feedback system where G(s) = s(s+2) (s+3) Fill in the a value:
Willow has a salary of $30,000 and experienced the following: Loss from theft of securities $(5,000) Personal casualty gain 4,000 Personal casualty loss (3,000) The amount of Willow's deduction from...
In our discussion of the permanent income hypothesis we categorized income as either permanent or temporary. Furthermore, we categorized people as either "consumption smoothers" or "hand-to- mouth."...
ACCT 4250/6250 Partnership Return Project Three friends decide to form a restaurant business. They decide not to incorporate and form a general partnership. Brendan has a 40% capital and profits...
A wizard casts a spell on a squirrel of mass 12, exerting a force that looks like: 7x + 4 What is the change is the squirrel's potential energy from x=4 to x=8?
Sir Isaac Newton twirls his corded headphones horizontally above his head just for fun. The headphones have a mass of 0.15 kg and are held by its cord which is 25 cm long. a. If the force of tension...
Explain the tax implications when dividends are attributable to a permanent establishment.
The marginal cost of producing Hwatoo (or Hanafuda) sets is constant at # 1,000 per a set in the competitive market. Though the market demand is known to be perfectly inelastic, the compensated...
Which of the following scenarios make it difficult to accurately measure the CPI? Correct Answer(s) Drag appropriate answer(s) here The typical basket of consumer goods does not change. A company...
Frontland Advertising creates, plans, and handles advertising campaigns in a three-state area. Recently, Frontland had to replace an inexperienced office worker in charge of bookkeeping because of...
Explain why the yield-to-maturity on a junk bond is not a particularly good measure of the return you can expect if you buy it and hold it until maturity.
Distinguish between the types of financial information contained in the various financial statements. Which statements provide information on a companys performance over a reporting period, and which...
In an odd twist of fate, the return on the stock market has been exactly 1% in each of the last eight months. The return on Simon Entertainment stock in the past eight months has been as follows: 8%,...
A regulation basketball is initially flat and is then inflated to a pressure of approximately $24 \mathrm{lb} / \mathrm{in}^{2}$ absolute. Consider the air temperature to be constant at...
The presence of raindrops in the air during a heavy rainstorm increases the average density of the air-water mixture. Estimate by what percent the average air-water density is greater than that of...
Assume that the air volume in a small automobile tire is constant and equal to the volume between two concentric cylinders $13 \mathrm{~cm}$ high with diameters of $33 \mathrm{~cm}$ and \(52...

a) Calculate the net present value Tax is paid on profits at the end of the year

Question:

Expert Answer:

Answer to a To calculate the net present value NPV of the RD6 satellite we need to discount the futu... View the full answer

Introduction to Corporate Finance What Companies Do

Students also viewed these finance questions