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eBook Argyl Manufacturing is evaluating the possibility of expanding its operations. This expansion will require the purchase of land at a cost of $120,000. A new building will cost $100,000 and will be deprecated on a straight-line basis over 25 years to a salvage value of $0 Actual land salvage at the end of 25 years is expected to be $210,000. Actual building salvage at the end of 25 years is expected to be $150,000. Equipment for the facility is expected to cost $260,000. Installation costs will be an additional $20,000 and shipping costs will be $14,000. This equipment will be depreciated as a 7-year MACRS asset. Actual estimated salvage at the end of 25 years is $0. The project will require net worldng capital of $65,000 Initially (year o), an additional $50,000 at the end of year 1, and an additional $50,000 at the end of year 2. The project is expected to generate increased EBIT (operating income) for the firm of $80,000 during year 1. Annual Edit is expected to grow at a rate of 3 percent per year until the project terminates at the end of year 25. The marginal tax rate is 40 percent, Use Table 9A-3 and Table 1 to answer the questions below. Round your answers to the nearest dolor Compute the initial net Investment. $ Compute the annual net cash now from the project in year 25. eBook Argyl Manufacturing is evaluating the possibility of expanding its operations. This expansion will require the purchase of land at a cost of $120,000. A new building will cost $100,000 and will be deprecated on a straight-line basis over 25 years to a salvage value of $0 Actual land salvage at the end of 25 years is expected to be $210,000. Actual building salvage at the end of 25 years is expected to be $150,000. Equipment for the facility is expected to cost $260,000. Installation costs will be an additional $20,000 and shipping costs will be $14,000. This equipment will be depreciated as a 7-year MACRS asset. Actual estimated salvage at the end of 25 years is $0. The project will require net worldng capital of $65,000 Initially (year o), an additional $50,000 at the end of year 1, and an additional $50,000 at the end of year 2. The project is expected to generate increased EBIT (operating income) for the firm of $80,000 during year 1. Annual Edit is expected to grow at a rate of 3 percent per year until the project terminates at the end of year 25. The marginal tax rate is 40 percent, Use Table 9A-3 and Table 1 to answer the questions below. Round your answers to the nearest dolor Compute the initial net Investment. $ Compute the annual net cash now from the project in year 25
