John James Rolly is the CFO of SD Yachts Inc., a manufacturer of boat fenders for luxury yachts.

John James Rolly is the CFO of SD Yachts Inc., a manufacturer of boat fenders for luxury yachts. Rolly is considering the purchase of a 2 to injection mold, which will allow the company to mold boat fenders. The equipment cost $250,000. The project is expected to produce after tax cash flows of $60,000 for the first year, and increase by $10,000 annually; the after-tax cash flow in year 5 will reach $100,000. Liquidation of the equipment will net the company $10,000 in cash at the end of 5 years.

a)     Assume that the required return is 15%. Is the project profitable?

b)     Assume that the required return is 19%. Is the project profitable?

c)     What is the IRR of the project?

d)     How will your answer change to part (a) if the company does not net anything on the liquidation of the equipment?

SD Yatch Inc.,MouldInitial CostNet asset costInitial outlay $$ 250,000.00250,000.00 $ 0(250,000.00) Incremental Cash flowsa The required return is 15%YearInitial outlayAfter tax salvage…

Show more

Calculate Your Essay Price
(550 words)

Approximate price: $22

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:
The price is based on these factors:
Academic level
Number of pages
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

Order your essay today and save 10% with the coupon code: best10