subject
Business, 14.05.2021 03:20 MendesMist

Gaston Company is considering a capital budgeting project that would require a $2,400,000 investment in equipment with a useful life of five years and no salvage value. The company’s tax rate is 30% and its after-tax cost of capital is 13%. It uses the straight-line depreciation method for financial reporting and tax purposes. The project would provide net operating income each year for five years as follows: Sales $3,400,000
Variable expenses 1,600,000
Contribution margin 1,800,000
Fixed expenses:
Advertising, salaries, and other fixed out-of-pocket costs $680,000
Depreciation 660,000
Total fixed expenses 1,340,000
Operating income $460,000

Required:
Compute the project's net present value.

ansver
Answers: 1

Another question on Business

question
Business, 22.06.2019 10:00
The solution set for -18 < 5x-3 iso-3х3< xо-3хo3 > x
Answers: 3
question
Business, 22.06.2019 13:10
Thomas kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. thomas's fastest-moving inventory item has a demand of 6,000 units per year. the cost of each unit is $100, and the inventory carrying cost is $10 per unit per year. the average ordering cost is $30 per order. it takes about 5 days for an order to arrive, and the demand for 1 week is 120 units. (this is a corporate operation, and the are 250 working days per year.)a) what is the eoq? b) what is the average inventory if the eoq is used? c) what is the optimal number of orders per year? d) what is the optimal number of days in between any two orders? e) what is the annual cost of ordering and holding inventory? f) what is the total annual inventory cost, including cost of the 6,000 units?
Answers: 3
question
Business, 22.06.2019 18:00
In which job role will you be creating e-papers, newsletters, and periodicals?
Answers: 1
question
Business, 22.06.2019 18:00
Bond j has a coupon rate of 6 percent and bond k has a coupon rate of 12 percent. both bonds have 14 years to maturity, make semiannual payments, and have a ytm of 9 percent. a. if interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds?
Answers: 2
You know the right answer?
Gaston Company is considering a capital budgeting project that would require a $2,400,000 investment...
Questions
question
History, 19.04.2021 20:20
question
World Languages, 19.04.2021 20:20
question
English, 19.04.2021 20:20
question
Mathematics, 19.04.2021 20:20
Questions on the website: 13722362