Question Details

(solution) Suppose your firm uses the NPV rule in making investment


Suppose your firm uses the NPV rule in making investment decisions and your after-tax OCF is $900,000.  Assume same full debt funding at 12%, tax rate is 40%, 20 year period, straight-line depreciation, initial investment of $4,000,000 and after-tax exit cost of $3,000,000.

A)What will be the before-tax OCF?

B) If the Required before-tax return on the investment is 14%, what is the NPV and do you make the investment?

C) How about if your firm requires a 8.4% after tax rate of return?

D) What is the IRR?

 


Solution details:

Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .
SiteLock

About this Question

STATUS

Answered

QUALITY

Approved

DATE ANSWERED

Sep 13, 2020

EXPERT

Tutor

ANSWER RATING

GET INSTANT HELP/h4>

We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.

You can also use these solutions:

  • As a reference for in-depth understanding of the subject.
  • As a source of ideas / reasoning for your own research (if properly referenced)
  • For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student.

NEW ASSIGNMENT HELP?

Order New Solution. Quick Turnaround

Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN A DEADLINE.

Order Now