Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please answer both or none! Thank you ahead of time. a. You are considering an investment in a machine that will cut your company's costs

Please answer both or none! Thank you ahead of time.

a. You are considering an investment in a machine that will cut your company's costs significantly. The cash flows are as follows: Investment amount: $80,000. Cash flows: Year 1--$30,000 Year 2--$35,000 Year 3--$50,000. Given a cost of capital of 15%, calculate the NPV of the project.

b. You invest in a project that has a depreciable asset. The asset is depreciable under the 5year MACRS category. The depreciation percentages for all six years are: 0.20, 0.32, 0.192, 0.115, 0.115, 0.058. On an asset worth $150,000, how much depreciation do you get to claim in year 3?

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

Step: 3

blur-text-image

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

Risk Management And Financial Institutions

Authors: John Hull

1st Edition

0132397900, 9780132397902

More Books

Students also viewed these Finance questions

Question

Stages of a Relationship?

Answered: 1 week ago