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TexMex Food Company is considering a new salsa whose data are shown below. Under the new tax law, the equipment to be used in the
TexMex Food Company is considering a new salsa whose data are shown below. Under the new tax law, the equipment to be used in the project is eligible for bonus depreciation, so it will be fully depreciated at t At the end of the projects life, the equipment would have zero salvage value, and no change in net operating working capital NOWC would be required for the project. Revenues and operating costs are expected to be constant over the project's year life. However, this project would compete with other TexMex products and would reduce their pretax annual cash flows. What is the project's NPVHint: Cash flows are constant in Years Do not round the intermediate calculations and round the final answer to the nearest whole number. WACC Pretax cash flow reduction for other products cannibalization $ Equipment cost $ Annual sales revenues $ Annual operating costs $ Tax rate a$ b$ c$ d$ e$
TexMex Food Company is considering a new salsa whose data are shown below. Under the new tax law, the equipment to be used in the project is eligible for bonus depreciation, so it will be fully depreciated at t At the end of the projects life, the equipment would have zero salvage value, and no change in net operating working capital NOWC would be required for the project. Revenues and operating costs are expected to be constant over the project's year life. However, this project would compete with other TexMex products and would reduce their pretax annual cash flows. What is the project's NPVHint: Cash flows are constant in Years Do not round the intermediate calculations and round the final answer to the nearest whole number.
WACC
Pretax cash flow reduction for other products cannibalization $
Equipment cost $
Annual sales revenues $
Annual operating costs $
Tax rate
a$
b$
c$
d$
e$
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