Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Ruby is considering opening a new business for a long - term care facility. The initial investment for the business is $ 6 5 0
Ruby is considering opening a new business for a longterm care facility. The initial investment for the business is $ which includes constructing the housing unit and purchasing other assets. For tax purposes, the projected salvage value of all the assets is $ The government requires depreciating the assets using the straightline method over the businesss life of years. Ruby is trying to estimate the net cashflows after tax for this business. She has already figured out that the business will generate an annual aftertax cash inflow of $ from the operation. She now needs your help to estimate the net cash inflow that she will receive from selling the facility's assets at the end of years. Ruby's required return is
Required:
Ruby estimates that, if the economic is booming at the end of the years, she can sell the assets for $ Assuming the tax rate of what is the net aftertax cashflow Ruby will receive from selling her assets at the end of years? Please round your answer to the nearest dollar. $
If Ruby is able to sell her assets for $ as mentioned in above, what is the Internal Rate of Return IRR for Ruby's business? Please round your answer to two decimal points, ie XXXX
Ruby estimates that, if the economy is in recess at the end of the years, she can sell the assets for $ Assuming the tax rate of what is the net aftertax cashflow Ruby will receive from selling her assets at the end of years? Please round your answer to the nearest dollar. $
If Ruby is able to sell her assets for $ as mentioned in above, what is the Net Present Value NPV for Ruby's business? Please round your answer to two decimal points $
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started