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{Please help with 28-29-30 Question 28 Litchfield Design is evaluating a 3-year project that would involve buying a new piece of equipment for 180,000 dollars
{Please help with 28-29-30
Question 28 Litchfield Design is evaluating a 3-year project that would involve buying a new piece of equipment for 180,000 dollars today. The equipment would be depreciated straight-line to 10,000 dollars over 2 years. In 3 years, the equipment would be sold for an after-tax cash flow of 23,000 dollars. In each of the 3 years of the project, relevant revenues are expected to be 127,000 dollars and relevant costs are expected to be 37,000 dollars. The tax rate is 50 percent and the cost of capital for the project is 11.51 percent. What is the NPV of the project? 1 point Number Help Number Question 29 1 point Number Help What is the NPV of project A? The project would require an initial investment in equipment of 71,000 dollars and would last for either 3 years or 4 years (the date when the project ends will not be known until it happens and that will be when the equipment stops working in either 3 years from today or 4 years from today). Annual operating cash flows of 25,560 dollars per year are expected each year until the project ends in either 3 years or 4 years. In 1 year, the project is expected to have an after-tax terminal value of 45,468 dollars. The cost of capital for this project is 12.15 percent. Number Question 30 Oxygen Optimization is considering buying a new purification system. The new system would be purchased today for 17,600 dollars. It would be depreciated straight-line to 1,200 dollars over 2 years. In 2 years, the system would be sold and the after-tax cash flow from capital spending in year 2 would be 2,000 dollars. The system is expected to reduce costs by 6,900 dollars in year 1 and by 13,100 dollars in year 2. If the tax rate is 50 percent and the cost of capital is 5.96 percent, what is the net present value of the new purification system project? 1 point Number Help NumberStep by Step Solution
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