Question
Nordique Fab is an Arizona company dedicated to circuit board design and fabrication. It has acquired new stations and software for its three facilities at
Nordique Fab is an Arizona company dedicated to circuit board design and fabrication. It has acquired new stations and software for its three facilities at a cost of $450,000 per site. The estimated MV for each cystm systemg the fourth year is expected to be 5% of the total capital investment, at which time the systems will be sold. The company believes that use of the new systems will enhance their circuit design business resulting in annual income of $1,000,000. annual operating and maintenance costs will be approximately $220,000. The company's marginal effective tax rate is 35% and the MARCS depreciation method (5 year GDS recovery period) will be used. Determine the after tax cash flow for this project. If the after tax MARR is 20% per year, would you recommend this investment?
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