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show all work please i) ii) and iii) 25. Thomley Machines is considering a 3-year project with an initial cost of $618,000. The project will
show all work please i) ii) and iii)
25. Thomley Machines is considering a 3-year project with an initial cost of $618,000. The project will not directly produce any sales but will reduce operating costs by $265,000 a year (i.e., Sales -Costs =265,000 ). The equipment is depreciated according to the MACRS 3 -year class. At the end of the project the equipment will be sold for an estimated $60,000. The tax rate is 34%. The project will require $23,000 in extra inventory for spare parts and accessories. Thomley's requires a 9% rate of retum. Find (remembering to set up the depreciation schedule for the fixed asset first) (i)The project's time 0 cash flow, (ii) The project's operating cash flow for years 1,2,3, (iii) The project's non-operating (terminal) cash flows, (iv) The project's NPV. Should it be invested in Step by Step Solution
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