Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please use excel to calculate the NPV A E G H M Q ABC Ltd. Is planning on investing $190,000 into a new piece of

please use excel to calculate the NPV

image text in transcribed
A E G H M Q ABC Ltd. Is planning on investing $190,000 into a new piece of machinery. If accepted initial investment will occur on January 1, 2021 N w Intial working capital required is $15,000 to support the new operations. The product will sell for $50 a unit and the cost to produce each unit will be $30 per unit. price will increase 1.1% year over year cogs will increase 2.2% year over year ABC LTd. Projects to produce and sell 2,200 units a year. The corporate tax rate is low at 15% on any profits sales will increase 5% year over year Capital cost allowance rate is = 20% 9 10 At the end of the 10 year project equipment initally costing $190,000 will have a $20,000 salvage value and will be depreciated straight line 11 over the 10 year period. Required rate of return is 10% 12 13 Fixed expenses are as follows: 14 Fixed s&A expenses 9,800 Depreciation 20,500 15 Question: calculate the NPV 16

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Entrepreneurship

Authors: Andrew Zacharakis, William D Bygrave

5th Edition

1119563097, 9781119563099

Students also viewed these Accounting questions