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9. Hogan Industries is considering an expansion. The necessary equipment would be purchased for $26 million and will be fully depreciated at the time of

9. Hogan Industries is considering an expansion. The necessary equipment would be purchased for $26 million and will be fully depreciated at the time of purchase, and the expansion would require an additional $1 million investment in net operating working capital. The tax rate is 25%. a. What is the total initial investment outlay after bonus depreciation is considered? b. What is the total initial investment outlay if the new equipment is straight-line depreciated over 13 years? Sales revenue Operating Costs Interest Expense 11 million 8 million 1 million c. Assume the financial data above. The company has a 25% tax rate, and its WACC is 11%. What is the project's operating cash flow for the first year (t = 1)?
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9. Hogan Industries is considering an expansion. The necessary equipment would be purchased for $26 million and will be fully depreciated at the time of purchase, and the expansion would require an additional $1 million investment in net operating working capital. The tax rate is 25%. a. What is the total initial investment outlay after bonus depreciation is considered? b. What is the total initial investment outlay if the new equipment is straight-line depreciated over 13 years? c. Assume the financial data above. The company has a 25% tax rate, and its WACC is 11%. What is the project's operating cash flow for the first year (t=1)

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