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really need help with these ASAP! :) thank you! BAFN370 Fall 2021 For the following 5 questions: CDCC is considering an expansion project that requires
really need help with these ASAP! :)
BAFN370 Fall 2021 For the following 5 questions: CDCC is considering an expansion project that requires an initial fixed asset investment (plant and equipment) of $10 million. Fixed assets will be depreciated using a 3-year MACRS schedule. The project will last for 10 years; at the end of 10 years, the fixed assets will have a market value equal to $500,000. The project will generate $2 million in annual sales, with expenses (both fixed and variable) running 40% of sales, CDCC's tax rate is 20%. 1) Compute OCF at T-1 under OLD rules. Year 1 2 3 4 3-Year MACRS 33% 44% 15% 8% 2) Suppose the project also requires an investment (an increase) in NWC of $200,000 at T=0 (which will be fully recovered at the end of the project's life). Compute the project's T=0 outflow under OLD rules. Be sure to enter you answer with a negative sign or it will be graded incorrectly 3) Under OLD rules, what is the equipment's ATSV at T=10? BAFN370 Fall 2021 For the following 5 questions: CDCC is considering an expansion project that requires an initial fixed asset investment (plant and equipment) of $10 million. Fixed assets will be depreciated using a 3-year MACRS schedule. The project will last for 10 years; at the end of 10 years, the fixed assets will have a market value equal to $500,000. The project will generate $2 million in annual sales, with expenses (both fixed and variable) running 40% of sales, CDCC's tax rate is 20%. 1) Compute OCF at T-1 under OLD rules. Year 1 2 3 4 3-Year MACRS 33% 44% 15% 8% 2) Suppose the project also requires an investment (an increase) in NWC of $200,000 at T=0 (which will be fully recovered at the end of the project's life). Compute the project's T=0 outflow under OLD rules. Be sure to enter you answer with a negative sign or it will be graded incorrectly 3) Under OLD rules, what is the equipment's ATSV at T=10 thank you!
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