Net Present Value Assignment | Homework for You
The firm is looking to expand its operations by 10% of the firm’s net property, plant, and equipment. (Calculate this amount by taking 10% of the property, plant, and equipment figure that appears on the firm’s balance sheet.) Apple Inc. currently has property and equipment as $37,378,000.00
The estimated life of this new property, plant, and equipment will be 12 years. The salvage value of the equipment will be 5% of the property, plant and equipment’s cost.
The annual EBIT for this new project will be 18% of the project’s cost.
The company will use the straight-line method to depreciate this equipment. Also assume that there will be no increases in net working capital each year. Use 35% as the tax rate in this project.
The hurdle rate for this project will be the WACC that you are able to find on a financial website, such as Gurufocus.com.
- Net present value
- Internal rate of return
- Discounted payback period.
- Should be purchased?
Need in Excel spreadsheet.Get Finance homework help today