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ABC Corporation has hired you to evaluate a new FOUR year project for the firm. The project will require the purchase of a $777,000.00 work
ABC Corporation has hired you to evaluate a new FOUR year project for the firm. The project will require the purchase of a $777,000.00 work cell. Further, it will cost the firm $51,200.00 to get the work cell delivered and installed. The work cell will be straight-line depreciated to zero with a 20 -year useful life. The project will require new employees to be trained at a cost of $52,100.00. The project will also use a piece of equipment the firm already owns. The equipment has been fully depreciated, but has a market value of $6,100.00. Finally, the firm will invest $11,600.00 in net working capital to ensure the project has sufficient resources to be successful. The project will generate annual sales of $905,000.00 with expenses estimated at 37.00% of sales. Net working capital will be held constant throughout the project. The tax rate is 40.00%. The work cell is estimated to have a market value of $490,000.00 at the end of the fourth year. The firm expects to reclaim 80.00% of the final NWC position. ABC Corporation has hired you to evaluate a new FOUR year project for the firm. The project will require the purchase of a $825,400.00 work cell. Further, it will cost the firm $53,100.00 to get the work cell delivered and installed. The work cell will be straight-line depreciated to zero with a 20 -year useful life. The project will require new employees to be trained at a cost of $52,800.00. The project will also use a piece of equipment the firm already owns. The equipment has been fully depreciated, but has a market value of $5,900.00. Finally, the firm will invest $10,800.00 in net working capital to ensure the project has sufficient resources to be successful. The project will generate annual sales of $913,000.00 with expenses estimated at 36.00% of sales. Net working capital will be held constant throughout the project. The tax rate is 37.00%. The work cell is estimated to have a market value of $459,000.00 at the end of the fourth year. The firm expects to reclaim 88.00% of the final NWC position. The cost of capital is 14.00%. What is the terminal cash flow for the project? ABC Corporation has hired you to evaluate a new FOUR year project for the firm. The project will require the purchase of a $775,800.00 work cell. Further, it will cost the firm $55,700.00 to get the work cell delivered and installed. The work cell will be straight-line depreciated to zero with a 20 -year useful life. The project will require new employees to be trained at a cost of $57,800.00. The project will also use a piece of equipment the firm already owns. The equipment has been fully depreciated, but has a market value of $7,400.00. Finally, the firm will invest $11,700.00 in net working capital to ensure the project has sufficient resources to be successful. The project will generate annual sales of $917,000.00 with expenses estimated at 39.00% of sales. Net working capital will be held constant throughout the project. The tax rate is 37.00%. The work cell is estimated to have a market value of $486,000.00 at the end of the fourth year. The firm expects to reclaim 88.00% of the final NWC position. The cost of capital is 12.00%. What is the NPV the project if we end the project after 4 years
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