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A company with the cos of capital of 14 percent is considering an investment in the project costing 500000 that would yield cash inflows of 100000 a year in perpetuity should the project be done?
Wiki User
∙ 14y ago
If it is really a return "in perpetuity" of $100K/yr, sure. Your return net of cost of capital would be ~6% (gross 20%). If the return was not in perpetuity but, say, for 12 years, you would at breakeven or in the hole if it was any shorter.
This is a pretty simiplistic question (and answer), in that it doesn't address the term of the cost of capital, or whether the 14% is an ongoing number for accounting purposes. Also, if this is for an investment in real estate or equipment, depreciation, upkeep, maintenance, and taxes all come into play.
Wiki User
∙ 14y ago
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You need money to start your own company this is know as?
A Capital Investment.
Which BEST represents capital investment for a company?
Buying new equipment.
Distinguish between foreign direct investment and portfolio investment?
Foreign direct investment is the provision of capital into a company or project by a financier who is from a foreign country. In portfolio investment, anyone can invest in the portfolio, whether or not he is from a local company or a foreign company.
A company's ability to attract and hold investment capital ultimately depends on its?
budgeting
What Is A Portfolio Company?
A portfolio company is a company in which a venture capital firm, buyout firm, holding company, or other investment fund invests.
Which of these BEST represents capital investment for a company?
the answer is advertising
What is example of venture capital?
One example of venture capital is taking a $1M investment and selling half your company. The value the investment is $2M.
You need money to start your own company this is know as?
A Capital Investment.
Which BEST represents capital investment for a company?
Buying new equipment.
Distinguish between foreign direct investment and portfolio investment?
Foreign direct investment is the provision of capital into a company or project by a financier who is from a foreign country. In portfolio investment, anyone can invest in the portfolio, whether or not he is from a local company or a foreign company.
How would you describe the cost of capital?
The minimum rate of return the company must earn to be willing to make the investment. It is the rate of return the company could earn if, rather than making the capital investment, it invested the money in an alternative, but comparable, investment.
Is the investment by the US company in an industry in Mexico is an example of capital outflow?
yes
A company's ability to attract and hold investment capital ultimately depends on its?
budgeting
What kind of company is Colony Capital?
Colony Capital is an investment firm based in Santa Monica, California. It is a private investment firm with a focus on real estate investments internationally.
What Is A Portfolio Company?
A portfolio company is a company in which a venture capital firm, buyout firm, holding company, or other investment fund invests.
How are capital investment decisions made?
Capital investment decisions are made by a group of executives in a business firm. These decisions are crucial to the longevity of not only the business but also the future stockholders of that company. http://www.finweb.com/investing/capital-investment-management-how-are-key-decisions-made.html
Adams Audio is considering whether to make an investment in a new type of technology Which of the following factors should the company consider when it decides whether to?
Adams Audio is considering whether to make an investment in a new type of technology. Which of the following factors should the company consider when it decides whether to undertake the investment? Best answer is available on onlinesolutionproviders.com thanks
