Question
Annual savings from Project X include a reduction of ten clerical employees with annual salaries of $15,000 each, $8,000 from reduced production delays, $12,000 from
Annual savings from Project X include a reduction of ten clerical employees with annual salaries of $15,000 each, $8,000 from reduced production delays, $12,000 from lost sales due to inventory stock - outs, and $3,000 in reduced utility costs. Project X costs $250,000 and will be depreciated over a five - year period using straight - line depreciation. Incremental expenses of the system include two new operators with annual salaries of $40,000 each and operating expenses of $12,000 per year. The firms tax rate is 34 percent. Task 3: Did you find the initial cash outlay of Project X? Did you find the projects operating cash flows over the five - year period? Did you evaluate whether the operating cash flows should be implemented if the projects requirement is 12 percent? FN2640 Project 4 Description/ Requirements of Project Evaluation Criteria a. Find Project Xs initial cash outlay. b. Find the projects operating cash flows over the five - year period. c. I f the projects required return is 12 percent, should it be implemented
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