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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
What is the additional nonoperating cash flow in Year
If the project's cost of capital is what is the NPV of the project?
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