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Goewelyn is considering opening a new business for a long-term care facily. The intial investment for the business is $650,000. Which includes constructing the housing
Goewelyn is considering opening a new business for a long-term care facily. The intial investment for the business is $650,000. Which includes constructing the housing unit and purchasing other assets. For tax purposes, the projected salvage value of all the assets is \$78,000. The government requltes depreciating the assets using the straightrine method over the business's life of 15 years. Gocwelyn is trying to estimate the net cashflows atter tax for this business. She has alresdy figured out that the bustiness wil generate an annual after-tax cash inflow of $5,000 from the operation, She now needs your help to estimate the net cash inflow that she will recelve from selling the facility's assets at the end of 15 years. Gaewelyn's required return is 8% Required: (1) Govwelyn estimases that, if the economic is booming at the end of the 15 years, she can sell the assets for $116,000. Assuming the rax rate of 30%, what is the net after-4ax cashflow Gaowelyn will recelve from selling her assets at the end of 15 years? Please round your answer to the nearest dollar) $ (2) If Gaewelyn is able to sell her assets for $116,000, os mentioned in (7) above, what is the Internal Rate of Return (IRR) for Gaewelyn's business? (Please round your answer to two decimal points, 10,5 ) \$s (3) Goevelyn estimates that, if the economy is in recess at the end of the 15 years, sthe can sell the assets for $48.000. Assuming the tax rate of 30%, what is the net after-tax cashflow Gaewelyn will recelve from selling her assets at the end of 15 years? (Please round your answer vo the nearest dollar) $ (4) If Gaewelyn is able to sell her assets for $48,000, as menuoned in (3) above, what is the Net Present Value (NPV) for Gaewelyn's business? (Please round your answer to two decimal points) Goewelyn is considering opening a new business for a long-term care facily. The intial investment for the business is $650,000. Which includes constructing the housing unit and purchasing other assets. For tax purposes, the projected salvage value of all the assets is \$78,000. The government requltes depreciating the assets using the straightrine method over the business's life of 15 years. Gocwelyn is trying to estimate the net cashflows atter tax for this business. She has alresdy figured out that the bustiness wil generate an annual after-tax cash inflow of $5,000 from the operation, She now needs your help to estimate the net cash inflow that she will recelve from selling the facility's assets at the end of 15 years. Gaewelyn's required return is 8% Required: (1) Govwelyn estimases that, if the economic is booming at the end of the 15 years, she can sell the assets for $116,000. Assuming the rax rate of 30%, what is the net after-4ax cashflow Gaowelyn will recelve from selling her assets at the end of 15 years? Please round your answer to the nearest dollar) $ (2) If Gaewelyn is able to sell her assets for $116,000, os mentioned in (7) above, what is the Internal Rate of Return (IRR) for Gaewelyn's business? (Please round your answer to two decimal points, 10,5 ) \$s (3) Goevelyn estimates that, if the economy is in recess at the end of the 15 years, sthe can sell the assets for $48.000. Assuming the tax rate of 30%, what is the net after-tax cashflow Gaewelyn will recelve from selling her assets at the end of 15 years? (Please round your answer vo the nearest dollar) $ (4) If Gaewelyn is able to sell her assets for $48,000, as menuoned in (3) above, what is the Net Present Value (NPV) for Gaewelyn's business? (Please round your answer to two decimal points)
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