Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A cente has a 7years contract Cost of special equipment needed now 500000 Initial supply of lubricants: 90000 Net annual operating cash flow: 150000 Salvage
A cente has a 7years contract Cost of special equipment needed now 500000 Initial supply of lubricants: 90000 Net annual operating cash flow: 150000 Salvage value of equipment in 7 years: 25000 The special equipment is in 5years property class. Thw tax rate is 30% for ordinary income and 15% for capital gain. the center after tax cost of capital is 16%. The present value after tax salvage receive on sale of equipment at the end of seven years.
A. 7519 B. 6192 C. 1327 D. 8846
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started