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can you please show me how you get the answers?? I can't quite figure out how to calculate depreciation and the free cash flow
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can you please show me how you get the answers??
I can't quite figure out how to calculate depreciation and the free cash flow specifically question 4 I have no idea how to get. but I understand how to get npv an irr once you get the free cash flows for years 1-5. please show work thoroughly thank you!
Pitman Bakery is considering the purchase of new $18,600 donut making equipment. The new equipment would permit the bakery to reduce the amount of part-time help needed, to a cost saving of $3,800 per year. In addition, the new equipment would allow the bakery to produce a new type of donut, which would replace one existing type, resulting in the sale of 1,000 donuts with an additional $1.2 in revenue per donut. The new machine would have a 6-year life and will be depreciated straight line to the book value of 0 . The salvage value at the end of year 6 is $9,125. The cost of capital is 12 percent. Compute EBIT for each year. What is the EBIT in years 1 through 6? Tax rate is 40%. 3800 1900 1200 Question 2 2 / 2 pts What is the after-tax salvage value? 5475 9125 Pitman Bakery is considering the purchase of new $18,600 donut making equipment. The new equipment would permit the bakery to reduce the amount of part-time help needed, to a cost saving of $3,800 per year. In addition, the new equipment would allow the bakery to produce a new type of donut, which would replace one existing type, resulting in the sale of 1,000 donuts with an additional $1.2 in revenue per donut. The new machine would have a 6-year life and will be depreciated straight line to the book value of 0 . The salvage value at the end of year 6 is $9,125. The cost of capital is 12 percent. Compute EBIT for each year. What is the EBIT in years 1 through 6? Tax rate is 40%. 3800 1900 1200 Question 2 2 / 2 pts What is the after-tax salvage value? 5475 9125Step by Step Solution
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