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please help with both :) Consider a firm in Los Angeles that is evaluating two projects. The first project is an expansion to open a
please help with both :)
Consider a firm in Los Angeles that is evaluating two projects. The first project is an expansion to open a theme park. The second project is to build a larger and more updated movie studio in a different location. The movie studio will cost $790 million dollars in the first year, but is projected to earn either $1 million or spend an additional $2 million in alternating years for the next 7 years until the studio gains popularity. The movie studio project is said to have Non-normal cash flows Nondependent cash flows Mutually exclusive cash flows Normal cash flows Idiosyncratic cash flows Mystic Beverage Company is considering purchasing a new bottling machine. The new machine costs $154,632. plus installation fees of $16,678 and will generate eaming before interest and taxes of $72,360 per year over its 6-year life. The machine will be depreciated on a straight-line basis over its 6-year life to an estimated salvage value of 0. Mystic's marginal tax rate is 0%. Mystic will require $38,944 in NWC if the machine is purchased. Determine the annual cash flow in year 3 if the machine is purchased, round your answer to two decimalsStep by Step Solution
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