Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

DSSS Corporation DSSS Corporation is considering a new project to manufacture widgets. The cost of the manufacturing equipment is $ 1 1 5 , 0

image text in transcribed
DSSS Corporation
DSSS Corporation is considering a new project to manufacture widgets. The cost of the manufacturing equipment is $115,000. The cost of shipping and installation is an additional $17,000. The asset will fall into the 3-year MACRS class. The year 1-4 MACRS percentages are 33.33%,44.45%,14.81%, and 7.41%, respectively. Sales are expected to be $220,000 per year. Cost of goods sold will be 60% of sales. The project will require an increase in net working capital of $17,000. At the end of three years, DSSS plans on ending the project and selling the manufacturing equipment for $30,000. The marginal tax ryte is 40% and DSSS Corporation's appropriate discount rate is 10%. The fixed expenses is $12,000.
Refer to DSSS Corporation. What is the IRR of the project?
17%
22%
25%
-19%
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Principles

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak

7th Canadian Edition Volume 1

1119048508, 978-1119048503

More Books

Students also viewed these Accounting questions

Question

1. Arouse curiosity with questions such as What would happen if?

Answered: 1 week ago

Question

What goals could you set to achieve HPTs for each of the projects?

Answered: 1 week ago

Question

What impact can leadership styles have on teams?

Answered: 1 week ago