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Please answer in excel & show formulas. The answer 136,083.45 is incorrect. A company is considering buying new fixed assets that would make its production
Please answer in excel & show formulas. The answer 136,083.45 is incorrect.
A company is considering buying new fixed assets that would make its production faster and more cost-efficient. To be specific, it would help the company save $145,000 every year, before taxes. The price of acquring these assets is $385,000. These fixed assets will be losing their economic value following the MACRS five-year property class schedule. The company is hoping to be able to sell the assets for $45,000 in five years when the project ends. The company would also need to plan for $20,000 in cash reserve that would be set aside immediately, and it would be necessary to increase it by $3,100 each year. The company pays 22 percent tax rate on its annual taxable income. The discount rate of 9 percent is appropriate for this project. Refer to Table 10.7 for relevant calculations. Calculate the Net Present Value associated with buying these fixed assets. (Do not round your intermediate calculations and only round your final answer to 2 decimal places, e.g., 32.16.) NPV $ 136,083.45 A company is considering buying new fixed assets that would make its production faster and more cost-efficient. To be specific, it would help the company save $145,000 every year, before taxes. The price of acquring these assets is $385,000. These fixed assets will be losing their economic value following the MACRS five-year property class schedule. The company is hoping to be able to sell the assets for $45,000 in five years when the project ends. The company would also need to plan for $20,000 in cash reserve that would be set aside immediately, and it would be necessary to increase it by $3,100 each year. The company pays 22 percent tax rate on its annual taxable income. The discount rate of 9 percent is appropriate for this project. Refer to Table 10.7 for relevant calculations. Calculate the Net Present Value associated with buying these fixed assets. (Do not round your intermediate calculations and only round your final answer to 2 decimal places, e.g., 32.16.) NPV $ 136,083.45Step by Step Solution
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