You discover the engine-oil additive your scientists develop…

You discover the engine-oil additive your scientists developed three years ago makes a great men’s after-shave once diluted properly using certain chemicals. How should you treat the original $125,000 of research & development (R&D) expenditures from three years ago that went into developing the engine-oil additive for your present decision regarding whether or not to begin production of the after-shave?

A project costs $75,000, will be depreciated straight-line t…

A project costs $75,000, will be depreciated straight-line to zero over its 3 year life, and will require a net working capital investment of $6,000 up-front. The project generates an annual operating cash flow (OCF) of $30,000. The fixed assets will be sold for $7,000 at the end of the project. If the firm has a tax rate of 35% and a required return of 8%, what is the project’s NPV?

A project costs $75,000 and will be depreciated straight-lin…

A project costs $75,000 and will be depreciated straight-line to zero over its 4 year life. The project generates annual OCF of $22,000 and the fixed assets will be sold for $9,000 at the termination of the project. If the firm has a tax rate of 35% and a required return of 10%, what is the NPV?

What is the profitability index of the following investment…

What is the profitability index of the following investment if the required return = 6%?             Year       0         1          2          3                    CF       -150     +$50    +$70    +$70

A project costs $100,000, will be depreciated straight-line…

A project costs $100,000, will be depreciated straight-line to zero over its 4 year life, and will require a net working capital investment of $5,000 up-front. The firm has a tax rate of 35% and a required return of 15%. The project generates an annual operating cash flow (OCF) of $45,000. What is the project’s NPV?