Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pls send this back in a excel document. With the formulas al Budgeting Decision for Project GRIZ This projectggarohres a ... neone could help ,

image text in transcribed

Pls send this back in a excel document. With the formulas

image text in transcribed
al Budgeting Decision for Project GRIZ This projectggarohres a ... neone could help , that'd be great ! Capital Budgeting Decision for Project GRIZ This project involves a new type of widget . We think we can sell 6, 0,00 units of the widget per year at a price of each . Variable costs will run about $400 per unit and the product should have a four - year life* $ 1, 200. 000 Fixed costs for the project will run $450, 000 per year and we will need to invest a total of in manufacturing equipment . The equipment will be depreciated using MACKS over seven years . in year four , the equipment will be worth half of what we paid for it . We will invest $1 , 150, 000 in net working capital at the start . After that , net working capital requirements will be 25% of sales. Assume a 34% tax rate . The MACRS Table is below : Year MACRS Percentage 14. 29 % 24.49 % 17.49 % 12.49 % Should we undertake the project ? HINT : Prepare a pro forma income statement for each year . Then calculate OCF . Draw this on a time line . Then calculate NPV assuming a 28% required return . he could help , that'd be great !! MENT PREVIEW attachment

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Financial Management Principles and Applications

Authors: Sheridan Titman, Arthur J. Keown, John H. Martin

13th edition

134417216, 978-0134417509, 013441750X, 978-0134417219

More Books

Students also viewed these Finance questions

Question

As a consultant, what are your ethical obligations, if any? mk5

Answered: 1 week ago