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New-Project Analysis Madison Manufacturing is considering a new machine that costs $350,000 and would reduce pre-tax manufacturing costs by $110,000 annually Madison would use the
New-Project Analysis Madison Manufacturing is considering a new machine that costs $350,000 and would reduce pre-tax manufacturing costs by $110,000 annually Madison would use the year MARS method to depreciate the machine and management thinks the machine would have a value of $33,000 at the end of its S-year operating . The applicable depreciation rates are 33.33%, 44.45, 14.01, and 7.41% Working capital would increase by $35,000 insay, but I would be recovered at the end of the project's 5 year ite Madison's marginal tax rate is 40%, and a 12% cost of capital is appropriate for the project a. Calculate the project's IV, IRR, MIRR, and payback. Do not round intermediate calculations. Round the monetary value to the nearest dollar and percentage values and payback to two decimal places. Negative values, if any, thoud te indicated by a minus sign NPVIS MIRR the gure could deviate by as much as plus or minus 20%. Do not found intermediate cautions. Round your answer to the nearest dolar. The pro 's payback b. Assume management is unsure about the $110,000 cost saving Negative values any, whoud te indicated by a mission Calculate the cost savings value deviate by plus 20%. Calculate the NPV cost savings value deviate by minus 20% is with Merent values for the cost savings, the machine's salvage value and the working capital (WC) recuirement. She asks you to use c. Suppose the CFO want you to do a scene and values in the scene analysis Scenario Probably Cont Savings Salvage Value C $28,000 $40,000 110.000 38,000 30,000 Calculate the project's expected its standard deviation, and its coment of variation. Do not round intermediate calculations. Round the monetary vas to the nearest doar and a concent af varten te two decimal places tegutive values an d be indicated by us sign Standard deviations Comment of variation
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