Question
Question Two : Your company is considering a project whose data are shown below. Revenue and cash operating expenses are expected to be constant over
Question Two : Your company is considering a project whose data are shown below. Revenue and cash operating expenses are expected to be constant over the project's 5 year expected operating life; annual sales revenue is $95,000.00 and cash operating expenses are $39,750.00. The new equipment's cost and depreciable basis is $140,000.00 and it will be depreciated by MACRS as 5 year property. The new equipment replaces older equipment that is fully depreciated but can be sold for $7,500. In addition, the new equipment requires an additional $5,000 of net operating working capital, which can be fully recovered at the end of the project. The new equipment is expected to be sold for $10,995 at the end of the project in year 5. The marginal tax rate is 20.00%. I got 134,000
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A. Using the information from problem 2 on Dominant Retailer, Inc., what is the Year 3 Net Operating Cash Flow? Enter your answer rounded to two decimal places. B. Using the information from problem 2 on Dominant Retailer, Inc., what is the Terminal Year Non-Operating Cash Flow at the end of Year 5? C. Using the information from problem 2 on Dominant Retailer, Inc., what is the NPV of the Project if Dominant Retailer's WACC is 15.75%? Enter your answer rounded to two decimal places
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