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1.) A company is considering a new 6-year project that will have annual sales of $201,000 and costs of $124,000. The project will require fixed

1.) A company is considering a new 6-year project that will have annual sales of $201,000 and costs of $124,000. The project will require fixed assets of $243,000, which will be depreciated on a 5-year MACRS schedule. The annual depreciation percentages are 20.00 percent, 32.00 percent, 19.20 percent, 11.52 percent, 11.52 percent, and 5.76 percent, respectively. The company has a tax rate of 35 percent. What is the operating cash flow for Year 2?

2.) Cori's Dog House is considering the installation of a new computerized pressure cooker for hot dogs. The cooker will increase sales by $7,700 per year and will cut annual operating costs by $13,800. The system will cost $47,700 to purchase and install. This system is expected to have a 6-year life and will be depreciated to zero using straight-line depreciation and have no salvage value. The tax rate is 35 percent and the required return is 11.3 percent. What is the NPV of purchasing the pressure cooker?

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