Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. amazing manufacturing, inc., has been considering

Amazing Manufacturing, Inc., has been considering the purchase of a new manufacturing facility for $490,000. The...

80.2K

Verified Solution

Question

Finance

Amazing Manufacturing, Inc., has been considering the purchaseof a new manufacturing facility for $490,000. The facility is to befully depreciated on a straight-line basis over seven years. It isexpected to have no resale value at that time. Operating revenuesfrom the facility are expected to be $385,000, in nominal terms, atthe end of the first year. The revenues are expected to increase atthe inflation rate of 5 percent. Production costs at the end of thefirst year will be $230,000, in nominal terms, and they areexpected to increase at 6 percent per year. The real discount rateis 8 percent. The corporate tax rate is 25 percent.

   

Calculate the NPV of the project. (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)

Answer & Explanation Solved by verified expert
3.6 Ratings (503 Votes)
    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Medical Sciences
1.2K views

Q1. Which of the following is TRUE of the absolute refractory period? Select one: a) it establishes the...

Psychology
1.2K views

Internship essay applying for Harley Davidson, about what Freedom means to you and why you want...

Biology
1.2K views

What factors can influence the price of oil Select all that may apply Availability of...

Geometry
1.2K views

1 A rectangular pyramid has a base with an area of 18 in If the...

Basic Math
1.2K views

n How to Tell a True War Story what does O Brien compare the war...

Basic Math
1.2K views

4 on the set a b R c d necessary and sufficient condition for a...

Basic Math
1.2K views

Indicate whether the equation has no solution or is true for all real numbers. Ifneither...

Statistics
1.2K views

S Find the indicated z score The graph depicts the standard normal distribution with mean...

Accounting
1.2K views

Explain why temporary accounts are closed each period.

Accounting
1.2K views

uick Pix is a large digital processing centre that serves 130 outlets in grocery stores,...

Accounting
1.2K views

Comparative financial statements for Weller Corporation, a merchandising company, for the fiscal year ending December...

Accounting
1.2K views

A company had expenses other than cost of goods sold of $290,000. Determine sales and...