Capital budgeting decision on new branch•Initial cost of building and equipment is $1 million•

4)Capital budgeting decision on new branch•Initial cost of building and equipment is $1 million•Expected to have a useful life of 20 years•At the end of the project the building and its equipment are expected to be sold for a $200,000 salvage value•The building and its equipment will be depreciated over their 20-year life using straight-line depreciation to a zero balance•The building is to be constructed on land leased for $20,000 per year•Net working capital must be increased by $100,000•Annual revenues from the new branch will be $400,000•Of this $400,000 in revenues, $50,000 will be drawn away from the bank’s main office•Net working capital must be increased by $100,000•The new branch will incur about $130,000 per year in other expenses•Both expenses and revenues are expected to remain approximately constant over the branch’s 20-year life•Marginal tax rate is 40%•Cost of capital 9%Answer the following questions:1.What is the cash flow for the branch’s 20-year life2.Calculate the NPV, Profitability index, and Internal rate of return (IRR).3.Should the project be accepted?2)Capital budgetingAn investment requires an outlay of $100,000 today. Cash inflow from the investment are expected to be $40,000 per year at the end of year 4, 5, 6, 7, and 8. You require a 20% rate of return on this type of investment. Answer the following questions:a.First draw the time line and specify the cash outflow and inflow for each period.b.Calculate the net present value.c.Calculate the Internal rate of return of this investment. d.Calculate the payback periodse.Shall the investment be undertaken?

Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Order your essay today and save 25% with the discount code: THANKYOUPlace Order
+