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Please show me the whole numbers before rounding them :) thank you!! NEW PROJECT ANALYSIS You must evaluate the purchase of a proposed spectrometer for
Please show me the whole numbers before rounding them :) thank you!!
NEW PROJECT ANALYSIS You must evaluate the purchase of a proposed spectrometer for the R&D department. The base price $140,000, and it would cost another $28,000 to modify the equipment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold after 3 years for $63,000. The applicable depreciation rates are 33%, 45% , 15 % , and 7%. The equipment would require a $11,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $77,000 per 40%. year in before-tax labor costs. The firm's marginal federal-plus-state tax rate a. What is the initial investment outlay for the spectrometer, that is, what is the Year 0 project cash flow? Round your answer to the nearest cent. Negative amount should be indicated by a minus sign. $ and 3? Round your answers to the nearest cent. b. What are the project's annual cash flows in Years 1, 2 In Year 1 $ In Year 2 $ In Year 3 $ c. If the WACC is 11%, should the spectrometer be purchased? SelectYStep by Step Solution
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