ABC Company is considering a new project with information as belows: - Initial investment is equivalent...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
ABC Company is considering a new project with information as belows: - Initial investment is equivalent to ID student (unit: billion VND) - Firm is executed free tax for the first two years, since the third year, firm has to pay tax rate is 25% per year. - Fixed asset is applied straight line method within 5 years with the residual value is 0 billion VND, liquidation of this asset is 200 billion VND and is recorded as other income. - Sale, expense and working capital as follows: Year Initial cost Sale Operating expense Fixed expense Other income Working capital demand 0 ID student 1 2 500,000 3 2,500,000 3,000,000 4,000,000 Assume the interest rate is 12% per year. a. Compute the cash flow of this project b. Compute the NPV, IRR c. Should the firm invest this project? Explain Unit: billion VND 4 2,000,000 2,500,000 3,000,000 1,700,000 2,000,000 200,000 200,000 200,000 200,000 200,000 5 4,500,000 5,000,000 600,000 500,000 800,000 200,000 ABC Company is considering a new project with information as belows: - Initial investment is equivalent to ID student (unit: billion VND) - Firm is executed free tax for the first two years, since the third year, firm has to pay tax rate is 25% per year. - Fixed asset is applied straight line method within 5 years with the residual value is 0 billion VND, liquidation of this asset is 200 billion VND and is recorded as other income. - Sale, expense and working capital as follows: Year Initial cost Sale Operating expense Fixed expense Other income Working capital demand 0 ID student 1 2 500,000 3 2,500,000 3,000,000 4,000,000 Assume the interest rate is 12% per year. a. Compute the cash flow of this project b. Compute the NPV, IRR c. Should the firm invest this project? Explain Unit: billion VND 4 2,000,000 2,500,000 3,000,000 1,700,000 2,000,000 200,000 200,000 200,000 200,000 200,000 5 4,500,000 5,000,000 600,000 500,000 800,000 200,000 ABC Company is considering a new project with information as belows: - Initial investment is equivalent to ID student (unit: billion VND) - Firm is executed free tax for the first two years, since the third year, firm has to pay tax rate is 25% per year. - Fixed asset is applied straight line method within 5 years with the residual value is 0 billion VND, liquidation of this asset is 200 billion VND and is recorded as other income. - Sale, expense and working capital as follows: Year Initial cost Sale Operating expense Fixed expense Other income Working capital demand 0 ID student 1 2 500,000 3 2,500,000 3,000,000 4,000,000 Assume the interest rate is 12% per year. a. Compute the cash flow of this project b. Compute the NPV, IRR c. Should the firm invest this project? Explain Unit: billion VND 4 2,000,000 2,500,000 3,000,000 1,700,000 2,000,000 200,000 200,000 200,000 200,000 200,000 5 4,500,000 5,000,000 600,000 500,000 800,000 200,000 ABC Company is considering a new project with information as belows: - Initial investment is equivalent to ID student (unit: billion VND) - Firm is executed free tax for the first two years, since the third year, firm has to pay tax rate is 25% per year. - Fixed asset is applied straight line method within 5 years with the residual value is 0 billion VND, liquidation of this asset is 200 billion VND and is recorded as other income. - Sale, expense and working capital as follows: Year Initial cost Sale Operating expense Fixed expense Other income Working capital demand 0 ID student 1 2 500,000 3 2,500,000 3,000,000 4,000,000 Assume the interest rate is 12% per year. a. Compute the cash flow of this project b. Compute the NPV, IRR c. Should the firm invest this project? Explain Unit: billion VND 4 2,000,000 2,500,000 3,000,000 1,700,000 2,000,000 200,000 200,000 200,000 200,000 200,000 5 4,500,000 5,000,000 600,000 500,000 800,000 200,000
Expert Answer:
Answer rating: 100% (QA)
Solution a Cash flow of the project Year 0 Initial investment 1000000 Cash outflow 1000000 Year 1 Sa... View the full answer
Related Book For
Applied Statistics in Business and Economics
ISBN: 978-0073521480
4th edition
Authors: David Doane, Lori Seward
Posted Date:
Students also viewed these finance questions
-
Is there evidence for a difference in the population means of the four groups? Justify your answer using specific value(s) from the output. Refer to the data with analysis shown in the following...
-
Today identified the top accounting firms in 10 geographic regions across the United States. All 10 regions reported growth in 2014. The Southeast and Gulf Coast regions reported growth of 1236% and...
-
1. a. Is there evidence of a difference between males and females in age, undergraduate grade point average, graduate grade point average, expected salary upon graduation, spending on textbooks and...
-
The insurance company Helmet is considering acquiring BeSafe, a life insurance company. According to BeSafes most recent financial statements, its loss ratio stands at 0.9, and its expense ratio...
-
A certain small car-wash business is currently being analyzed to see if costs can be reduced. Customers arrive according to a Poisson process at a mean rate of 15 per hour, and only one car can be...
-
The acentric factor for all materials is always (a) 0 (b) 1 (c) \( <1\) (d) \(>1\).
-
Lockridge-Priest, Inc., was organized in 2008. At December 31, 2008, the Lockridge-Priest balance sheet reported the following stockholders' equity: Requirements 1. During 2009 , the company...
-
In the current year, Wilson Enterprises, a calendar year taxpayer, suffers a casualty loss of $90,000. How much of the casualty loss will be deductible by Wilson under the following circumstances? a....
-
Constrained population growth of bacteria and amoebae is governed by the following: The amoebae will decrease by 150% if left undisturbed. The bacteria will increase by 80% if left undisturbed. . The...
-
Gulf Uniform Supply, Inc. (GUS), a merchandising business, is organized as a corporation. The business sells a complete line of uniforms for a variety of businesses and organizations, including...
-
Shamrock Corporation reported net cash provided by operating activities of $ 4 3 6 , 7 2 0 , net cash used by investing activities of $ 2 6 5 , 0 0 0 , and net cash provided by financing activities...
-
Based on your reading assignment and by web research using the COPS library, explain how community-oriented policing is an approach toward crime that addresses the underlying causes of crime and...
-
How application security can be used against the emerging threats in securing Microsoft windows computers and software.?
-
Magic Realm, Incorporated, has developed a new fantasy board game. The company sold 47,000 games last year at a selling price of $69 per game. Fixed expenses associated with the game total $846,000...
-
An array A=[42, 20,17,13, 28, 14, 23, 15, 36, 54, 75, 93, 5, 101] is input to build a MaxHeap tree. How many leaf nodes in the MaxHeap?
-
The functions s and t are defined as follows. s(x) = -2x+1 t(x)=-5x-5 Find the value of s (t (4)).
-
Product AB has a suggested selling price of $27 per unit and a projected variable cost per unit of $15. Fixed costs are expected to increase by $197,040 per month. How many units must be sold each...
-
Write a paper by answer the following question: Should Recycling Be Mandatory?
-
Inspect the residual plot to check for heteroscedasticity and report your conclusions.
-
(a) Use MegaStat or MINITAB to deseasonalize the quarterly data on Coca-Cola's revenues and t a trend. Interpret the results. (b) Use MegaStat or MINITAB to perform a regres- sion using seasonal...
-
Fifty employee travel expense reimbursement vouchers were led last quarter in the finance department at Ramjac Corporation. Of these, 20 contained errors. A corporate auditor inspects five vouchers...
-
A scientist wants to determine whether people who live in places with high levels of air pollution get more colds than people in areas with little air pollution. Do you think it is possible to design...
-
Draw a simple random sample of eight animals from the list of 40 animals in the table. Exercises 2124 refer to the population of animals in the following table. The population is divided into four...
-
In the 1936 presidential election, Republican candidate Alf Landon challenged President Franklin Roosevelt. The Literary Digest magazine conducted a poll in which they mailed questionnaires to more...
Study smarter with the SolutionInn App