Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

is using the webc Use the following to answer the next two questions: The managers of Poncho Parts, Inc. plan to manufacture engine blocks for

image text in transcribed
is using the webc Use the following to answer the next two questions: The managers of Poncho Parts, Inc. plan to manufacture engine blocks for classic cars from the 1960s era. They expect to sell 250 engine blocks annually for the next 5 years at a sales price of $3,000 per block. The necessary foundry and machining equipment will cost a total of $800,000 and will be depreciated on a straight-line basis to zero over the project's life. The firm expects to be able to sell the manufacturing equipment for $150,000 at the end of the project. Labor and materials costs total $500 per engine block and fixed costs are $125,000 per year. Assume a 35% tax rate and a 12% discount rate. D Question 39 9 pts What is the expected after-tax cash flow (salvage value) to the firm when the equipment is sold in year 5? O $65.000 O $120,125 O $115,000 O $97,500 O $100,000 D Question 40 9 pts What is the NPV of this project? O $628,744 O $260,769 O $521,309 O $401,187 O $644,678 Guard Noticed Sum

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cases In Healthcare Finance

Authors: Louis C. Gapenski

3rd Edition

1567932444, 9781567932447

More Books

Students also viewed these Finance questions