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Problem 9-23 Depreclation and Project Value (LO3) Bottoms Up Diaper Service is considering the purchase of a new industrial washer. It can purchase the washer
Problem 9-23 Depreclation and Project Value (LO3) Bottoms Up Diaper Service is considering the purchase of a new industrial washer. It can purchase the washer for $9.600 and sell its old washer for $3.400. The new washer will last for 6 years and save $2,900 a year in expenses. The opportunity cost of capital is 22%, and the firm's tax rate is 21% 0. If the firm uses straight-line depreciation over a 6-year life, what are the cash flows of the project in years 0 to 6 ? The new washer will have zero salvage value after 6 years, and the old washer is fully depreciated. Note: Negatlve amounts should be Indleated by a minus slgn. b. What is project NPV? Note: Do not round Intermedlate calculatlons. Round your answer to 2 declmal pleces. c. What is NPV if the firm investment is entitled to immediate 100% bonus depreciation? Note: Do not round Intermedlate calculations. Round your answer to 2 declmal places
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