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CT Computer Corp. is considering whether to begin offering customers the option to have their old personal computers recycled when they purchase new systems. The
CT Computer Corp. is considering whether to begin offering customers the option to have their old personal computers recycled when they purchase new systems. The recycling system would require CT Computers to invest $in the grinders and magnets used in the recycling process. Estimates suggest that for each system it recycles, it would generate $ in incremental revenues from the sale of scrap metal and plastics. The machinery has a fiveyear useful life and will be depreciated using straight line depreciation toward a zero salvage value. CT Corp estimates that in the first year of the recycling investment it could recycle computers and that this number will grow to per year over the remaining four year life of the recycling equipment. CT Corp uses a discount rate to analyze capital expenditures and pays a tax rate of
QUESTIONS THAT NEED TO BE IN EXCEL:
What is the project cash flow?
Calculate Free cash flows, set up timeline, DCF Find NPV and IRR
Is this a good project?
If CT Corp is able to recycle only computers, is this investment still a good idea?
How many number of computers must CT Corp recycle for this to remain a positive NPV project?
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