Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. the company, produce in-house in the us; the cost

The company, produce in-house in the US; The cost of equipment totals into 32.5 million at...

Free

50.1K

Verified Solution

Question

Finance

The company, produce in-house in the US; The cost of equipmenttotals into 32.5 million at the start of the first year. Which willhave a salvage value of 3 million at the end of 6 years. After arecent area 51 raid, the company acquired a team of Area 51 alienswith an annual demand of 500,000. The operational costs andsoftware maintenance is 700,000 annually. As the years go by, aninflation of 16% will demand increasing prices for these values.What will be the net present worth?

Answer & Explanation Solved by verified expert
3.9 Ratings (486 Votes)

Revenue for first year=51*500000=$25.5mn

Year Revenue Salvage Operational Cost Net Cash Flow Present Value (Cash Flow/1.16^year)
0        (32,500,000) 0 0    (32,500,000)                                         (32,500,000.00)
1          25,500,000 0 700000      24,800,000                                           21,379,310.34
2          29,580,000 0 812000      28,768,000                                           21,379,310.34
3          34,312,800 0 941920      33,370,880                                           21,379,310.34
4          39,802,848 0 1092627.2      38,710,221                                           21,379,310.34
5          46,171,304 0 1267447.552      44,903,856                                           21,379,310.34
6          53,558,712 0 1470239.16      52,088,473                                           21,379,310.34
7          62,128,106        3,000,000 1705477.426      63,422,629                                           22,440,798.93
PW (total)                                         118,216,661.00

Hence, net present worth is $118.2 mn
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

Advance Math
1.2K views

Using Excel, Mathcad, or any similar program, create a 256-point zero-mean random noise sample i(x). (a) Calculate...

Chemistry
1.2K views

Calculate the mass of nitrogen dissolved at room temperature in an 88.0 L home aquarium. Assume...

Psychology
1.2K views

Define personality. Describe the four basic theoretical perspectives in personality, including the psychoanalytic, humanistic, social cognitive, and...

Operations Management
1.2K views

Write a summary on the ways in which restructuring a health care plan can produce real...

General Management
1.2K views

Dirt Bikes’s management believes that the company could benefit from e-commerce. The company has sold motorcycles...

Accounting
1.2K views

Imperial Jewelers manufactures and sells a gold bracelet for $404.00. The company’s accounting system says that...

Physics
1.2K views

10 Find the equivalent resistance of the network between the points A and B shown...

Accounting
1.2K views

Babuca Corporation has provided the following production and total cost data for two levels of...

Accounting
1.2K views

Johnston manufacturing company purchased 14,000 switches to make 6,000 units. the standard allows for 2...

Accounting
1.2K views

Basic accounting questions focus on topics concerning the financial statements and how transactions are recorded.Accounting...

Accounting
1.2K views

State two examples of business segments and explain why these would be feasible business segments....

Accounting
1.2K views

For the year ended December 31, 2020, the job cost sheets of DeVoe Company contained...