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the table below is the table thagbis used to setup yje problem correctly Chicago Turkey Data Current Proposed Turkeys per Year Cost per Turkey Shipping
the table below is the table thagbis used to setup yje problem correctly
Chicago Turkey Data Current Proposed Turkeys per Year Cost per Turkey Shipping Cost per Turkey Selling Price Total Cost per. Turkey Additional Gross Profit per Turkey Investment in Additional Turkeys Land Cost Buildings Cost Labor Expense Depreciation Salvage Value (Buildings) Annual Depreciation Expense Actual Salvage Value (Land) Actual Salvage Value (Buildings) Life of Project Tax Rate Weighted Average Cost of Capital 4. Chicago Turkey is considering a new turkey farm to service its western region stores. The stores currently require 650,000 turkeys per year, and they are pur= chased from various local turkey farms for an average price of $8 per bird. The managers believe that their new farm would lower the cost per bird to $7, while maintaining the average selling price of $12 per bird. However, due to the centralized structure of this operation, shipping expenses will increase to $1.25 per bird from the current $1.00. The firm will need to increase its inventory of live turkeys by $45,000. It will cost $200,000 to purchase the land and $350,000 to construct the buildings and purchase equipment. In addition, labor expense will rise by $250,000 per year. The buildings and equipment will be depreciated using the straight-line method over five years to a salvage value of $100,000. After five years, the company will sell the farm for $300,000 ( $100,000 for the buildings and equipment, $200,000 for the land). The firm's marginal tax rate is 25%. Note that land is not depreciable. a. Calculate the initial outlay, after-tax cash flows, and terminal cash flow for this project. b. If the WACC is 12%, calculate the payback period, discounted payback period, NPV, PI, IRR, and MIRR. c. Management is uncertain about several of the variables in your analysis and have asked you to provide three different scenarios Step by Step Solution
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