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excel please show how you got your answers FLIR is considering investing in a manufacturing equipment to produce seaworthy drones. The price of the equipment
excel please show how you got your answers
FLIR is considering investing in a manufacturing equipment to produce seaworthy drones. The price of the equipment will be $3,385,000, and its economic life is five years. The machine falls into the 5 year MACRS asset class and will be depreciated using those rates. At the end of the project life, FLIR expects to sell the equipment in the used market for $450,000. From the start, 2,250 drones will be produced each year. The price of each drone will be $4,355 in the first year and will increase by 3 percent per year. The production cost per drone will be $3,750 in the first year and will increase by 2 percent per year. The project will have an annual fixed cost of $555,000 and require an immediate investment of $167,000 in net working capital. The corporate tax rate for the company is 25 percent. If the appropriate discount rate is 12 percent, what is the NPV and MIRR of the investment? 1 20.000% MACRS Depreciation Year: Depreciation Rate 2 32.000% 3 19.200% 11.520% 5.76 11.520% Your Name(s): Question 1 - Capital Budgeting Value Value Inputs inputs Setup Initial Outlays Year TerminalValue Years Year 1 Operating Cash Flows: Sales price Cost per unit Year 2 Year 3 Year 4 Years Total cash flow NPV MIRRStep by Step Solution
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