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- After cash flow Table please? - Net present value= - IRR= 10.43 Gentry Machines, Inc., has just received a special job order from one
- After cash flow Table please?
- Net present value=
- IRR=
10.43 Gentry Machines, Inc., has just received a special job order from one of its clients. The following financial data on the order have been collected: . This two-year project requires the purchase of a special-purpose piece of equipment for $55,000. The equipment falls into the MACRS five-year class. The machine will be sold at the end of two years for $27,000 (today's dollars). . The project will bring in an additional annual revenue of $114,000 (actual dollars), but it is expected to incur an additional annual operating cost of $53,800 (today's dollars). To purchase the equipment, the firm expects to borrow $50,000 at 10% over a two-year period (equal annual payments of $28,810 in actual dollars). The remaining $5,000 will be taken from the firm's retained earnings. The firm expects a general inflation of 5% per year during the project period. The firm's marginal tax rate is 40%, and its market interest rate is 18%. 10.43 Gentry Machines, Inc., has just received a special job order from one of its clients. The following financial data on the order have been collected: . This two-year project requires the purchase of a special-purpose piece of equipment for $55,000. The equipment falls into the MACRS five-year class. The machine will be sold at the end of two years for $27,000 (today's dollars). . The project will bring in an additional annual revenue of $114,000 (actual dollars), but it is expected to incur an additional annual operating cost of $53,800 (today's dollars). To purchase the equipment, the firm expects to borrow $50,000 at 10% over a two-year period (equal annual payments of $28,810 in actual dollars). The remaining $5,000 will be taken from the firm's retained earnings. The firm expects a general inflation of 5% per year during the project period. The firm's marginal tax rate is 40%, and its market interest rate is 18%Step by Step Solution
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