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The president of your company, MorChuck Enterprises, has asked you to evaluate the proposed acquisition of a new chromatograph for the firm's R&D department. The
The president of your company, MorChuck Enterprises, has asked you to evaluate the proposed acquisition of a new chromatograph for the firm's R&D department. The equipment's basic price is $ and it would cost another $ to modify it for special use by your firm. The chromatograph, which falls into the MACRS year class, would be sold after years for $ The MACRS rates for the first three years are and Use of the equipment would require an increase in net working capital spare parts inventory of $ The machine would have no effect on revenues, but it is expected to save the firm $ per year in beforetax operating costs, mainly labor. The firm's marginal federalplusstate tax rate is Cash outflows and negative NPV value, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest dollar.
What is the Year net cash flow?
$
What are the project recurring cash flows in Years and
Year : $
Year : $
Year : $
What is the additional nonoperating cash flow in Year
$
If the project's cost of capital is what is the NPV of the project?
$
Should the chromatograph be purchased?
Select
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