Jasper Metals is considering installing a new molding machine
which is expected to produce operating cash flows of $64,000 per
year for 8 years. At the beginning of the project, inventory will
decrease by $23,200, accounts receivables will increase by $24,600,
and accounts payable will increase by $17,700. 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 $276,000. 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 $66,000. What is the net present value of
this project given a required return of 10.9 percent?
$95,472
$106,400
$102,516
$88,528
$92,552
One year ago, you purchased 100 shares of Titan Wood Products
for $48.29 per share. The stock has paid dividends of $.55 per
share over the past year and is currently priced at $53.18. What is
your total dollar return on your investment?
$516.50
$489.00
$562.13
$272.00
$544.00
Jasper Metals is considering installing a new molding machine which is expected to produce operating cash flows of $64,0
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