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Can you double check my answers? Our widget-maker is going to spend 553 on new product development. Without this new spending, the widget-maker would have
Can you double check my answers?
Our widget-maker is going to spend 553 on new product development. Without this new spending, the widget-maker would have EBIT of 241 . The widget-maker's marginal tax rate is 30%. If the widgetmaker forgoes the new product development, how much would he expect to pay in taxes? ABC is starting a new project. It will require new equipment costing 33 . The project is expected to increase gross profits by 21 per year, starting at the end of the first year, with associated costs of 12 for each of those years. The machine is expected to have a working life of 7 years and will be depreciated over those 7 years. The marginal tax rate is 0.3 . What are the incremental free cash flows associated with the new machine in year 2? A widget-maker is considering upgrading his machinery for a cost of 17 . The change would increase revenues by 40 for 2 years. The discount rate is 0.09 . What is the npvStep by Step Solution
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