Question
bottoms up diaper service is considering the purchase of a new industrial washer. it can purchase the new washer for $7,800 and sell the old
bottoms up diaper service is considering the purchase of a new industrial washer. it can purchase the new washer for $7,800 and sell the old washer for $1,600. The new wahser will last for 6 years and save $2,300 a year in expenses. The opportunity cost of capital is 17% and the firm's tax rate is 21%. a) if the firm uses straight line depreciation over a 6 year life what are the cash flows of project 0 to 6? The new washer will have zero salvage value after 6 years, and the old washer is full depreciated. b) what is the project NPV? c)what is the NPV if the firm investment is entitled to immediate 100% bonus depreciation?
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