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Can you label /bold the answers to make it clear please and thanks you~ 5 10 points eEgg is considering the purchase of a new
Can you label /bold the answers to make it clear please and thanks you~
5 10 points eEgg is considering the purchase of a new distributed network computer system to help handle its warehouse Inventories. The system costs $60,000 to purchase and Install and $37,000 to operate each year. The system is estimated to be useful for 4 years. Management expects the new system to reduce the cost of managing inventories by $67,500 per year. The firm's cost of capital (discount rate) IS 9% Required: 1. What is the net present value (NPV) of the proposed Investment under each of the following Independent situations? (Use the appropriate present value factors from Appendix C. TABLE 1 and Appendix C. TABLE 2) 1a. The firm is not yet profitable and therefore pays no Income taxes. 16. The firm is in the 23% Income tax bracket and uses straight-line (SLN) depreciation with no salvage value. Assume MACRS rules do not apply. 1c. The firm is in the 23% Income tax bracket and uses double-declining-balance (DDB) depreciation with no salvage value. Given a four-year life, the DDB depreciation rate is 50% (I.e., 2 x 25%). In year four, record expense as the net book value (NBV) of the asset at the start of the year. 2 What is the internal rate of return (IRR) of the proposed Investment for situations in requirement 1, parts (a) through (c)? Use the IRR built-in function in Excel to compute the IRR. Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Reg 10 Reg 2 The firm is not yet profitable and therefore pays no income taxes. (Round your answer to nearest whole dollar amount.) Net present valueStep by Step Solution
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