Question
SOLVE USING EXCEL!!! Bottoms Up Diaper Service is considering the purchase of a new industrial washer. It can purchase the washer for $3,300 and sell
SOLVE USING EXCEL!!!
Bottoms Up Diaper Service is considering the purchase of a new industrial washer. It can purchase the washer for $3,300 and sell its old washer for $900. The new washer will last for 6 years and save $700 a year in expenses. The opportunity cost of capital is 11%, and the firms tax rate is 21%.
a. If the firm uses straight-line depreciation over a 6-year life, what are the cash flows of the project in years 0 to 6? The new washer will have zero salvage value after 6 years, and the old washer is fully depreciated. Note: Negative amounts should be indicated by a minus sign.
b. What is project NPV? Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
c. What is NPV if the firm investment is entitled to immediate 100% bonus depreciation? Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
a. annual operating cash flow in year 0:
annual operating cash flow in years 1-6:
b. NPV:
c: NPV:
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