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Pls help Epiphany Industries is considering a new capital budgeting project that will last for three years. Epiphany plans on using a cost of capital
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Epiphany Industries is considering a new capital budgeting project that will last for three years. Epiphany plans on using a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incremental cash flow projects: 0 Year Sales (Revenues) - Cost of Goods Sold (50% of Sales) - Capital Cost Allowance = EBIT - Taxes (35%) = unlevered net income + Capital Cost Allowance + changes to working capital - capital expenditures 1 100,000 50.000 13,500 36,500 12,775 23,725 13,500 -5000 2 100,000 50,000 22,950 27,050 9468 17,582 22,950 -5000 3 100,000 50,000 16,065 33,935 11,877 22,058 16,065 10,000 -90,000 The net present value (NPV) for Epiphany's Project is closest toStep by Step Solution
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