Answered step by step
Verified Expert Solution
Question
1 Approved Answer
pls answer all TIA Intro DeLuxe Furniture is thinking of buying a wood cutting machine for $190,000 that would save it $50,000 per year in
pls answer all TIA
Intro DeLuxe Furniture is thinking of buying a wood cutting machine for $190,000 that would save it $50,000 per year in production costs. The savings would be constant over the project's 3-year life. The machine is to be linearly depreciated to zero and will have no resale value after 3 years. The machine would require an additional $4,000 in net working capital. The appropriate cost of capital for this project is 11% and the company's tax rate is 35%. Part 1 Attempt 1/10 for 10 pts. What is the cash flow from assets in year 0 ? Choose the right sign. Part 2 ( O Attempt 1/10 for 10 pts. What is the cash flow from assets in year 1 ? Part 3 ( 0 Attempt 1/10 for 10 pts. What is the cash flow from assets in year 2? What is the cash flow from assets in year 3 ? Hint: add the recovery of net working capital. Part 5 What is the NPV of this project? Intro DeLuxe Furniture is thinking of buying a wood cutting machine for $190,000 that would save it $50,000 per year in production costs. The savings would be constant over the project's 3-year life. The machine is to be linearly depreciated to zero and will have no resale value after 3 years. The machine would require an additional $4,000 in net working capital. The appropriate cost of capital for this project is 11% and the company's tax rate is 35%. Part 1 Attempt 1/10 for 10 pts. What is the cash flow from assets in year 0 ? Choose the right sign. Part 2 ( O Attempt 1/10 for 10 pts. What is the cash flow from assets in year 1 ? Part 3 ( 0 Attempt 1/10 for 10 pts. What is the cash flow from assets in year 2? What is the cash flow from assets in year 3 ? Hint: add the recovery of net working capital. Part 5 What is the NPV of this projectStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started