Problem 6 26 Project Analysis and Inflation Shinoda Manufacturing, Incorporated, has been considering the purchase of a new manufacturing facility for $580,000 The facility is to be fully depreciated on a straightline basis over seven years It is expected to have no resale value at that time Operating revenues from the facility are expected to be $430,000, in nominal terms, at the end of the first year The revenues are expected to increase at the inflation rate of 4 percent Production costs at the end of the first year will be $275,000, in nominal terms, and they are expected to increase at 5 percent per year The real discount rate is 7 percent The corporate tax rate is 24 percent Calculate the NPV of the Project Shinoda Manufacturing, Incorporated, has been considering the purchase of a new manufacturing facility for $580,000 The facility is to be fully depreciated on a straightline basis over seven years It is expected to have no resale value at that time Operating revenues from the facility are expected to be $430,000, in nominal terms, at the end of the first year The revenues are expected to increase at the inflation rate of 4 percent Production costs at the end of the first year will be $275,000, in nominal terms, and they are expected to increase at 5 percent per year The real discount rate is 7 percent The corporate tax rate is 24 percent Calculate the NPV of the project (Do not round intermediate calculations and round your answer to 2 decimal places, e g , 32 16 )

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Problem 6-26 Project Analysis and Inflation Shinoda Manufacturing, Incorporated, has been considering the purchase of a new manufacturing facility for $580,000. The facility is to

Problem 6-26 Project Analysis and Inflation Shinoda Manufacturing, Incorporated, has been considering the purchase of a new manufacturing facility for $580,000. The facility is to be fully depreciated on a straightline basis over seven years. It is expected to have no resale value at that time. Operating revenues from the facility are expected to be $430,000, in nominal terms, at the end of the first year. The revenues are expected to increase at the inflation rate of 4 percent. Production costs at the end of the first year will be $275,000, in nominal terms, and they are expected to increase at 5 percent per year. The real discount rate is 7 percent. The corporate tax rate is 24 percent. Calculate the NPV of the Project image text in transcribed

Shinoda Manufacturing, Incorporated, has been considering the purchase of a new manufacturing facility for $580,000. The facility is to be fully depreciated on a straightline basis over seven years. It is expected to have no resale value at that time. Operating revenues from the facility are expected to be $430,000, in nominal terms, at the end of the first year. The revenues are expected to increase at the inflation rate of 4 percent. Production costs at the end of the first year will be $275,000, in nominal terms, and they are expected to increase at 5 percent per year. The real discount rate is 7 percent. The corporate tax rate is 24 percent. Calculate the NPV of the project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)