Question
I need to find out how to resolve this questions so I can figure questions like this one out on my own the next time.
I need to find out how to resolve this questions so I can figure questions like this one out on my own the next time. Bottoms Up Service is considering the purchase of a new industrial washer. It can purchase the washer for 9600 and sell its old washer for 3400. the new washer will last 6 years and save 2900 a year in expenses. The opportunity cost of capital is %22, and the firm's tax rate is %21.
A. if the firm uses straight-line depreciation over a 6 year life, what are the cash flows of the project in years 0 to 6? The new washer will have zero salvage value after 6 years, and the old washer is fully depreciated. (negative accounts should be indicated by a minus sign)
A. Annual operating cash flow in year 0 =
Annual operating cash flow in year 1 to 6 =
B. What is project NPV? (do not round intermediate calculations, round your answer to two decimal points)
NPV=
C. What is NPV if the firm investment is entitled to immediate 100% bonus depreciation's? (do not round intermediate calculations, round your answer to two decimal points)
C. NPV=
Please show me how you get your answers so I can calculate these types of problems on my own.
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