Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Billy Bob's Crab & Oyster Shack wants to reduce the cost of labour by replacing some labour with machines. If Billy Bob's were s were

image text in transcribed
Billy Bob's Crab & Oyster Shack wants to reduce the cost of labour by replacing some labour with machines. If Billy Bob's were s were to purchase machine to shuck the oysters, it can save $50,000 a year for 10 years. The new machine will cost $650,000 and it will be worth $50.000 at the end of the 10 year period. The firm believes it will need $10,000 in spare parts inventory (increase in wc), which it can call for the $5,000 at the end of the project. The machine has a 20% CCA rate and the firm has a 15% tax rate. If they want a 20% return on their investment what's the NPV? Round your answer to the nearest dollar, no dollar sign no commas, put negative sign if needed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Debt Resisters Operations Manual

Authors: Strike Debt Strike Debt

1st Edition

1604866799, 978-1604866797

More Books

Students also viewed these Finance questions