Question
Input Data: Property & equipment (FA) $680,000,000 Shipping & installation fee $25,000,000 Depreciation Basis $705,000,000 Unit Sold in Year 1 2,560,000 Required NOWC as %
Input Data: Property & equipment (FA) $680,000,000
Shipping & installation fee $25,000,000
Depreciation Basis $705,000,000
Unit Sold in Year 1 2,560,000
Required NOWC as % of Sales 12%
Annual Growth Rate of Sales 5.5%
Unit Sales Price in Year 1 $255
Variable Costs (VC) per Unit in Year 1 $200
Annual Inflation: Growth in Sales Price 1.80%
Annual Inflation: Growth in VC per unit 1.80%
Company Tax Rate 26.0% WACC 7.20%
Fixed Asset MACRS Class 10
Duration of the project 11
Calculate the Market Value of FA at Salvage?
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Principles of managerial finance
Authors: Lawrence J Gitman, Chad J Zutter
12th edition
9780321524133, 132479540, 321524136, 978-0132479547
