ch 11 question 9

on the sale of the oxisting machine. The firm has a 86%1 cost of capital and is sutjed to a 40% tax rate a. Develop the net cash flows needed to analyze the proposed replacement. b. Determine the not present value (NPV) of the proporal c. Determine the internal rate of retum (IRR) of the proposal d. Make a recommendabion to accept of reject the replscement propstal, aed fustly your answer e. What is the highest cost of capital thas tie firm could have dnd still accopt the proporaa? a. Develop the relevant cash llows needed to analyze the proposed roplacemert Calculate the intiak investment. (Recind to the neareat dolar) (Click on the icon located on the top-right comer of the data table below in order to copy its contents into a spreadsheet) Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes *These percentages have been rounced to uit neation for tax purposes, be sure to apply the actual retaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or directly apply double-declining balance (200%) depreciation using the half-year convention