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De Caradoc Machine Shop is considering a four-year project to Improve its production efficiency. Buying a new machine press for $41,000 is estimated to result
De Caradoc Machine Shop is considering a four-year project to Improve its production efficiency. Buying a new machine press for $41,000 is estimated to result in $151.000 in annual pre-tax cost savings. The press falls into Class 8 for CCA purposes (CCA rate of 20% per year, and it will have a salvage value at the end of the project of $55.100. The press also requires an initial investment in spare parts Invertory of $21,000, along with an additional $3.200 In inventory for each succeeding year of the project. If the shop's tax rate is 35% and its discount rate is 9% Calculate the NPV of this project. (Do not round your intermediate calculations. Round the final answer to 2 decimal places. Omits sign in your response) NPV $ 14297 . Should the company buy and Install the machine press? Yes O No De Caradoc Machine Shop is considering a four-year project to Improve its production efficiency. Buying a new machine press for $41,000 is estimated to result in $151.000 in annual pre-tax cost savings. The press falls into Class 8 for CCA purposes (CCA rate of 20% per year, and it will have a salvage value at the end of the project of $55.100. The press also requires an initial investment in spare parts Invertory of $21,000, along with an additional $3.200 In inventory for each succeeding year of the project. If the shop's tax rate is 35% and its discount rate is 9% Calculate the NPV of this project. (Do not round your intermediate calculations. Round the final answer to 2 decimal places. Omits sign in your response) NPV $ 14297 . Should the company buy and Install the machine press? Yes O No
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