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Help Sa Willoughby Deli is expecting to generate the following from a $690,000 investment: Year 1 2 3 4. 5 6 Earnings before Amortization and
Help Sa Willoughby Deli is expecting to generate the following from a $690,000 investment: Year 1 2 3 4. 5 6 Earnings before Amortization and Taxes $214,000 211,000 266,000 194,000 215,000 200,000 Cash flows (after taxes and preferred share dividends) $169,450 167,800 198,050 158,450 170,000 161,750 Additional Information: . the asset will be fully depreciating over the six-year time period, using straight-line depreciation, and Willoughby Deli has a 45.00 percent tax rate. . Requirements: Compute: 1. Average Account Return 1. the payback period 2. IRR for the project 3. NPV If WACC is 10.00 percent Year 2 3 4 5 6 Amortization and Taxes $214.000 211,000 266,000 194,000 215.000 200,000 preferred share dividends) $169,450 167,800 198,050 158,450 170,000 161,750 Additional Information: the asset will be fully depreciating over the six-year time period, using straight-line depreciation, and . Willoughby Deli has a 45.00 percent tax rate. Requirements: Compute: 1. Average Account Return 1. the payback period 2. IRR for the project 3. NPV if WACC is 10.00 percent Should the project be undertaken? (Click to select)
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