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#16 The management of Kimco is evaluating replacing their large mainframe computer with a modern network system that requires much less office space. The network
#16 The management of Kimco is evaluating replacing their large mainframe computer with a modern network system that requires much less office space. The network would cost $485,480.00 (including installation costs) and due to efficiency gains, would generate $120,323.00 per year in operating cash flows (accounting for taxes and depreciation) over the next five years. The old mainframe has a remaining book value of $42,713.00 and would be immediately donated to a charity for the tax benefit. Kimco's cost of capital is 12.00% and the tax rate is 38.00%. What is the initial cash outlay (cash flow at year 0) for this project? (express as a negative) Submit Answer format: Currency: Round to: 2 decimal places. #17 The management of Kimco is evaluating replacing their large mainframe computer with a modern network system that requires much less office space. The network would cost $524,145.00 (including installation costs) and due to efficiency gains, would generate $133,464.00 per year in operating cash flows (accounting for taxes and depreciation) over the next five years. The old mainframe has a remaining book value of $47,091.00 and would be immediately donated to a charity for the tax benefit. Kimco's cost of capital is 10.00% and the tax rate is 38.00%. What is the NPV for this project? Submit Answer format: Currency: Round to: 2 decimal places
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