Top Posters
Since Sunday
g
3
3
2
J
2
p
2
m
2
h
2
s
2
r
2
d
2
l
2
a
2
Home Q & A Board Other Fields Homework Help Business Finance
New Topic  
emyleepatton emyleepatton
wrote...
Go to Answer
Posts: 487
Rep: 14 0
4 years ago
Use the information for the question(s) below.

Temporary Housing Services Incorporated (THSI) is considering a project that involves setting up a temporary housing facility in an area recently damaged by a hurricane.  THSI will lease space in this facility to various agencies and groups providing relief services to the area.  THSI estimates that this project will initially cost $5 million to set up and will generate $20 million in revenues during its first and only year in operation (paid in one year). Operating expenses are expected to total $12 million during this year and depreciation expense will be another $3 million.  THSI will require no working capital for this investment.  THSI's marginal tax rate is 35%.  


Assume that THSI's cost of capital for this project is 15%.  The net present value (NPV) of this temporary housing project is closest to:

▸ -$435,000

▸ -$650,000

▸ $435,000

▸ $1,960,000
Textbook 
Fundamentals of Corporate Finance

Fundamentals of Corporate Finance


Edition: 2nd
Authors:
Read 111 times
2 Replies
Replies
Answer verified by a subject expert
johnsykejohnsyke
wrote...
#1
Posts: 406
Rep: 61 0
4 years ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
1

Related Topics

emyleepatton Author
wrote...
#2
4 years ago
Thank you for answering so quickly
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  1101 People Browsing
 114 Signed Up Today
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 260
  
 550
  
 590
Your Opinion
Where do you get your textbooks?
Votes: 328
Previous poll results: Which country would you like to visit for its food?