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I need help on these two questions and I need it in the next 45 minutes. Answers will be checked instantly so I'll accept and tip generously for correctness.
Your corporation is considering replacing older equipment. The old machine is fully depreciated and cost $44000 seven years ago. The old equipment currently has no market value. The new equipment cost $65000. The new equipment will be depreciated to zero using straight-line depreciation for the four-year life of the project. At the end of the project the equipment is expected to have a salvage value of $19100. The new equipment is expected to save the firm $27000 annually by increasing efficiency and cost savings. The corporation has tax rate of 30% and a required return on capital of 8.8%. What is the total initial cash outflow? (nearest dollar, show your answer as a negative number) What are the estimated annual operating cash flows? (nearest dollar) What is the terminal cash flow? (nearest dollar) What is the NPV for this project? (nearest dollar) 5. Your corporation is considering investing in a new product line. The annual revenues for the new product line are expected to be $370000 with variable costs equal to 50% of these sales. In addition annual fixed costs associated with this new product line are expected to be $58800. The old equipment currently has no market value. The new equipment cost $52000. The new equipment will be depreciated to zero using straight-line depreciation for the three-year life of the project. At the end of the project the equipment is expected to have a salvage value of $14100. An increase in net working capital of $60000 is also required for the life of the project. The corporation has a beta of 1.4, a tax rate of 34%, and a target capital structure consisting of 63% equity and 37% debt. Treasury securities have a yield of 3.2% and the expected return on the market is 9.8%. In addition, the company currently has outstanding bonds that have a yield to maturity of 4.4%. What is the total initial cash outflow? (nearest dollar, show your answer as a negative number) What are the estimated annual operating cash flows? (nearest dollar) What is the terminal cash flow? (nearest dollar) What is the corporation's cost of equity? (4 decimals) What is the WACC? (4 decimals) What is the NPV for this project? (nearest dollar)Step by Step Solution
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