A branch manger of FAPA Inc. is considering replacing some equipment in his division. The existing equipment was purchased two years ago for $80,000, belongs to a CCA class with a rate of 25 percent, and can be sold now for $59,000. Its resale value in five years will be $9,000. The new equipment will cost $120,000 and belongs to the same CCA class as the old equipment. The resale value of the new equipment in five years will be $15,000. Additional working capital of $5,000 would be required when the new equipment is installed, and the total amount would be recovered at the end of five years. FAPA's tax rate is 43% and its cost of capital is 25%. FAPA estimates that the new equipment will reduce operating cost by $32,000 per year and increase revenues by 2,000 per year for five years. Interest payments for the project are estimated to be 21,500 every year. The discounted cashflows for period 0 (including all initial cashflows and changes in working capital) are? Answer rounding to the nearest integer (ZERO decimals), do not include any symbols, like dollar signs ($) percentage signs (%) or thousand separators (,). If solution is a negative number include a - sing before the number whiteout any space. For example : -1152 A The discounted cashflows for period 3 are? Answer rounding to the nearest integer (ZERO decimals), do not include any symbols, like dollar signs ($) percentage signs (%) or thousand separators (,). If solution is a negative number include a - sing before the number whiteout any space. For example : -1152 A/ The discounted cashflows for period 5 (including all terminal cashflows and operative cashflows) are? Answer rounding to the nearest integer (ZERO decimals), do not include any symbols, like dollar signs ($) percentage signs (%) or thousand separators (,). If solution is a negative number include a - sing before the number whiteout any space. For example : -1152 A/ The NPV of the replacement project is ? Answer rounding to the nearest integer (ZERO decimals), do not include any symbols, like dollar signs ($) percentage signs (%) or thousand separators (,). If solution is a negative number include a - sing before the number whiteout any space. For example : -1152 A Should the company replace the equipment (yes or no)? A branch manger of FAPA Inc. is considering replacing some equipment in his division. The existing equipment was purchased two years ago for $80,000, belongs to a CCA class with a rate of 25 percent, and can be sold now for $59,000. Its resale value in five years will be $9,000. The new equipment will cost $120,000 and belongs to the same CCA class as the old equipment. The resale value of the new equipment in five years will be $15,000. Additional working capital of $5,000 would be required when the new equipment is installed, and the total amount would be recovered at the end of five years. FAPA's tax rate is 43% and its cost of capital is 25%. FAPA estimates that the new equipment will reduce operating cost by $32,000 per year and increase revenues by 2,000 per year for five years. Interest payments for the project are estimated to be 21,500 every year. The discounted cashflows for period 0 (including all initial cashflows and changes in working capital) are? Answer rounding to the nearest integer (ZERO decimals), do not include any symbols, like dollar signs ($) percentage signs (%) or thousand separators (,). If solution is a negative number include a - sing before the number whiteout any space. For example : -1152 A The discounted cashflows for period 3 are? Answer rounding to the nearest integer (ZERO decimals), do not include any symbols, like dollar signs ($) percentage signs (%) or thousand separators (,). If solution is a negative number include a - sing before the number whiteout any space. For example : -1152 A/ The discounted cashflows for period 5 (including all terminal cashflows and operative cashflows) are? Answer rounding to the nearest integer (ZERO decimals), do not include any symbols, like dollar signs ($) percentage signs (%) or thousand separators (,). If solution is a negative number include a - sing before the number whiteout any space. For example : -1152 A/ The NPV of the replacement project is ? Answer rounding to the nearest integer (ZERO decimals), do not include any symbols, like dollar signs ($) percentage signs (%) or thousand separators (,). If solution is a negative number include a - sing before the number whiteout any space. For example : -1152 A Should the company replace the equipment (yes or no)
