Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

5-7. Your firm is considering investing in a project to redose sosts by 556.000 annually. The equipment costs $183.000, had a 4-year tife (will be

image text in transcribed
5-7. Your firm is considering investing in a project to redose sosts by 556.000 annually. The equipment costs $183.000, had a 4-year tife (will be depreciated as a 3-year MACRS asset: 33\% for the Ist year. 45% for the 2 nd year, and 15% for the 3rd year), requires $8,000 initial cost in net working capital, and has a before-tax salvage value of $23,000. The discotint nate is 1006 . Tax rate is 21%6. 5. What's the OCF in year 1 ? 6. What's the Depreciation in year 2? 7. What's the NPV? Accept or Reject

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions