Question: Global Enterprises is considering a new 5-year project that will require $872,000 for new fixed assets, $210,000 for inventory, and $80,000 for accounts receivable. Accounts

Global Enterprises is considering a new 5-year project that will require $872,000 for new fixed assets, $210,000 for inventory, and $80,000 for accounts receivable. Accounts payable is expected to increase by $140,000. The fixed assets will be depreciated straight-line to zero over the projects life. At the end of the project, the fixed assets are expected to be sold for 30 percent of their original cost, and the net working capital will return to its original level.The tax rate is 35 percent. What is the initial cost of this project?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

One thousand kilograms per hour of a 45 wt% acetone in- water solution is to be extracted at 25?C in a Continuous, countercurrent system with pure 1,1 ,2-trichloroethane to obtain a raffinate...

Here is the question 12 Margarite's Enterprises is considering a new 5-year project that will require $612,000 for new fixed assets, $160,000 for Inventory, and $35,000 for accounts receivable....

Freya Enterprises is considering a new 5-year project that will require $763,000 for new fixed assets, $180,000 for inventory, and $70,000 for accounts receivable. Short-term debt is expected to...

Margarite's Enterprises is considering a new 5-year project that will require $612,000 for new fixed assets, $160,000 for inventory, and $35,000 for accounts receivable. Short-term debt is expected...

Also, what is the annunal OCF ? 33. (15 points) Margarite's Enterprises is considering a new project. The project will require new fixed assets, $160,000 for additional inventory and $35,000 for...

I have attached the questions . Thank you. please as discussed there is a time limit of 2 and half hours thank you 1.Thompson & Son has been busy analyzing a new product. It has determined that an...

you just purchased some equipment that is classified as 5-year property for macrs. the equipment cost $67,600. what will the book value of this equipment be at the end of three years should you...

Margarite's Enterprises is considering a new project. The project will require $325,000 for new fixed assets, $160,000 for additional inventory and $35,000 for additional accounts receivable,...

Jake's Auto Sales currently sells $3.4 million of new vehicles and $1.7 million of used vehicles a year. Jake is considering expanding his operations and adding an imported car to his lineup. Should...

Ivashina Enterprises is considering a new project. The project will require $365,964 for new fixed assets, $176,261 for additional inventory, and $36,071 for additional accounts receivable. Accounts...

Ivashina Enterprises is considering a new project. The project will require $312,159 for new fixed assets, $159,819 for additional inventory, and $32,964 for additional accounts receivable. Accounts...

Locate the center of mass of the system shown in Fig. 6.39 (a) If all of the masses are equal; (b) If m2 = m4 = 2m1 = 2m3; (c) If m1 = 1.0 kg, m2 = 2.0 kg. m3 = 3.0 kg and m4 = 4.0 kg. (0, 40 m (4.0...

(S)-i-Chloro-2-mcthylbutane undergoes light-induced reaction with Cl2 by a radical mechanism to yield a mixture of products, among which are 1, 4-dichloro-2-methylbutanc and 1,...

Net operating loss ( NOL ) and net capital loss carryovers are deductible in calculating the charitable contribution limit modified taxable income, while net capital loss carrybacks are not. True or...

Draw a class diagram and its relationship based on the following statements. You can use any UML tool/software to represent your class diagram. Do NOT copy and paste your diagram, use the attachment...