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Eggz, Incorporated, is considering the purchase of new equipment that will allow the company to collect loose hen feathers for sale. The equipment will cost
Eggz, Incorporated, is considering the purchase of new equipment that will allow the company to collect loose hen feathers for sale. The equipment will cost $525,000 and will be eligible for 100 percent bonus depreciation. The equipment can be sold for $35,000 at the end of the project in five years. Sales would be $348,000 per year, with annual fixed costs of $56,000 and variable costs equal to 35 percent of sales. The project would require an investment of $40,000 in NWC that would be returned at the end of the project. The tax rate is 22 percent and the required return is 9 percent. Calculate the NPV of this project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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