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Could you please explain how you find the results for the question 11 ? I have already the answer because I asked before, however the
Could you please explain how you find the results for the question 11 ? I have already the answer because I asked before, however the person that answered did not put an explanation only table!
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10. 11. 12. Calculating Project OCF Bush Boomerang, Inc., is considering a new three- year expansion project that requires an initial fixed asset investment of $2.1 mil- lion. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to gener- ate $1,900,000 in annual sales, with costs of $850,000. If the tax rate is 35 per- cent, what is the OCF for this project? Calculating Project NPV In the previous problem, suppose the required re- turn on the project is 15 percent. What is the project's NPV? Calculating Project Cash Flow from Assets In the previous problem, sup- pose the project requires an initial investment in net working capital of $275,000 and the fixed asset will have a market value of $325,000 at the end of the proj- ect. What is the project's Year 0 net cash flow? Year 1? Year 2? Year 3? What is the new NPV? NPV and Modified ACRS In the previous problem, suppose the fixed asset actually falls into the three-year MACRS class. All the other facts are the same. What is the project's Year 1 net cash flow now? Year 2? Year 3? What is the new NPV? 13Step by Step Solution
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