Question 10 (3 points) C. (Questions 10 - 13) (20 points) Shade Your Eyes, Inc. makes sunglasses that cost $115 per pair. They want to buy equipment necessary to reduce their costs by $1 per pair. It will cost $350,000 and will be depreciated on a straight-line basis over the 6-year life of the machine. There is no increase in Net Working Capital for this project. The margin before is $310,900, and with the new machine it will increase to $475,100. The required return is 15%, and the tax rate is 40%. You want to determine if you should buy this new equipment. 10) To determine the Operating Cash Flow, what is the formula used (3 points) OA) OCF-NCS-NWC OB) EBIT + D-T O C) Profit (1-T) - (D) (T) OD SV - (SV-BV)(T) Previous Page Next Page Page 10 of 18 Previous Page Next Page Page 11 of 18 Question 11 (6 points) C. (Questions 10 - 13) (20 points) Shade Your Eyes, Inc. makes sunglasses that cost $115 per pair. They want to buy equipment necessary to reduce their costs by $1 per pair. It will cost $350,000 and will be depreciated on a straight-line basis over the 6-year life of the machine. There is no increase in Net Working Capital for this project. The margin before is $310,900, and with the new machine it will increase to $475,100. The required return is 15%, and the tax rate is 40%. You want to determine if you should buy this new equipment. 11) What is the change in Operating Cash Flow (OCF) (6 points)? round to nearest dollar, enter only the number with commas if necessary. Previous Page Next Page Page 11 of 18 Submit Quiz O of 19 questions saved MacBook Pro F4 F10 $ ER TY uol LEIGH Question 12 (3 points) C. (Questions 10 - 13) (20 points) Shade Your Eyes, Inc. makes sunglasses that cost $115 per pair. They want to buy equipment necessary to reduce their costs by $1 per pair. It will cost $350,000 and will be depreciated on a straight-line basis over the 6-year life of the machine. There is no increase in Net Working Capital for this project. The margin before is $310,900, and with the new machine it will increase to $475,100. The required return is 15%, and the tax rate is 40%. You want to determine if you should buy this new equipment. 12) Solving for NPV, which formula should you use (3 points)? (1+R A. CF CE B. B. Zt=0 (1+R) c. PV (1 + R) D. 1-CF(1 + R) OA OB MacBook Pro F9 F10 L7 8 9 0 ' YUT Previous Page Next Page Page 13 of 18 Question 13 (8 points) C. (Questions 10 - 13) (20 points) Shade Your Eyes, Inc. makes sunglasses that cost $115 per pair. They want to buy equipment necessary to reduce their costs by $1 per pair. It will cost $350,000 and will be depreciated on a straight-line basis over the 6-year life of the machine. There is no increase in Net Working Capital for this project. The margin before is $310,900, and with the new machine it will increase to $475,100. The required return is 15%, and the tax rate is 40%. You want to determine if you should buy this new equipment. 13)What is the NPV of this investment (8 points)? round to nearest dollar, enter the number with commas if necessary. Previous Page Next Page Page 13 of 18 Submit Quiz O of 19 questions saved MacBook Pro 3 ER TY uo
