my question is Q13, projected evaluation, thank you so much!
1000 and is me. The asset is to be used Jull, the asset can be sold for $192.000. If Werdent, what is the aftertax cash flow from the sale of this 2 asser? & Calculating Salve the five-year MACR $6,500,000 and will 35 percent, what is the Calculating Project expansion project that rec fixed asset will be der which time it will be w annual sales, with this project? 10. Calculating Salvage Value (LO1] An asset used in a four-year project falls in ar MACRS class for tax purposes. The asset has an acquisition cost of and will be sold for $1.600.000 at the end of the proiect. If the tax rate is sent, what is the aftertax salvage value of the asset? ng Project OCF (LO1] Quad Enterprises is considering a new three-year project that requires an initial fixed asset investment of $2.9 million. The et will be depreciated straight-line to zero over its three-year tax life, after time it will be worthless. The project is estimated to generate $2,190,000 in sales, with costs of $815,000. If the tax rate is 35 percent, what is the OCF for Jaulating Project NPV (LO1] In the previous problem, suppose the required return on the project is 12 percent. What is the project's NPV? Calculating Project Cash Flow from Assets (LO1] In the previous problem, sup- pose the project requires an initial investment in net working capital of $300,000, and the fixed asset will have a market value of $210,000 at the end of the project. What is the project's Year 0 net cash flow? Year 12 Year 2? Year 3? What is the new NPV? 12 NPV and Modified ACRS (LO1] In the previous problem, suppose the fixed asset actually falls into the three-year MACRS class. All the other facts are the same. What is the project's Year 1 net cash flow now? Year 2? Year 3? What is the new NPV? 13. Project Evaluation [LO1] Dog Up! Franks is looking at a new sausage system with an installed cost of $540,000. This cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the sausage system can be scrapped for $80,000. The sausage system will save the firm $170,000 per year in pretax op- erating costs, and the system requires an initial investment in net working capital of $29,000. If the tax rate is 34 percent and the discount rate is 10 percent, what is the NPV of this project? 14. Project Evaluation (LO1] Your firm is contemplating the purchase of a new $425,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $30,000 at the end of that time. You will save $130.000 before taxes per year in order processing costs, and you Will be able to reduce working capital by $60,000 (this is a one-time reduction). If the tax rate is 35 percent, what is the IRR for this project? Project Evaluation (LO2] In the previous problem, suppose your required return on the project is 11 percent and your pretax cost savings are $150,000 per year. Will you accept the project? What if the pretax cost savings are $100,000 per year? At What level of pretax cost savings would you be indifferent between accepting the project and not accepting it? Calculating EAC (LO4] A five-year project has an initial fixed asset investment of on and on annuel CE of -$35.000 15
