Question
EE printing is in the evaluation process for the acquisition of a new computer system. The total depreciable base (cost plus installation) is $210,000. The
EE printing is in the evaluation process for the acquisition of a new computer system. The total depreciable base (cost plus installation) is $210,000.
The new equipment will increase earnings before depreciation and taxes by $68,000 during years 1 to 3 and $33,000 during years 4 to 6.
EE marginal tax rate is 35% and Cost of Capital is 10%
Calculate the Net Present Value
USE THE PRESENT VALUE FORMULA TO CALCULATE PRESENT VALUE OF CASH FLOWS. DO NOT MAKE INTERMEDIATE ROUNDINGS AND PRESENT YOUR FINAL ANSWER ROUNDED WITH ZERO DECIMAL PLACES. IF YOUR ANSWER IS A NEGATIVE NUMBER USE THE MINUS SIGN EX -5000.
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Economics For Investment Decision Makers
Authors: Sandeep Singh, Christopher D Piros, Jerald E Pinto
1st Edition
1118111966, 9781118111963
