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URGENT HELP REQUIRED FOR THE FOLLOWING QUESTIONS: Hubrey Home Inc. is considering a new threeyear expansion project that requires an initial fixed asset investment of

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URGENT HELP REQUIRED FOR THE FOLLOWING QUESTIONS:

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Hubrey Home Inc. is considering a new threeyear expansion project that requires an initial fixed asset investment of $2.9 million. The fixed asset falls into Class 10 for tax purposes (CCA rate of 30% per year], and at the end of the three years can be sold for a salvage value equal to its UCC. The project is estimated to generate $2,550,000 in annual sales, with costs of $808,000. If the tax rate is 35%, what is the OCF for each year of this project? (Enter the answers in dollars. Do not round your Intermediate calculations. Round the final answers to 2 decimal places. Omit 3 sign In your response.) deal 5 ocaz s aces s l 2 A five-year project has an initial fixed asset investment of $280,000, an initial NWC investment of $24,000, and an annual OCF of - $23,000. The fixed asset is fully depreciated over the life of the project and has no salvage value. If the required return is 12%, what is this project's equivalent annual cost, or EAC? (Negative answer should be indicated by a minus sign. Do not round your intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) Equivalent annual cost $3 Caradoc Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $416,000 is estimated to result in $156,000 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 $55,600. The press also requires an initial investment in spare parts inventory of $26,000, along with an additional $3,700 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. Omit $ sign in your response.) NPV $ Should the company buy and install the machine press? O Yes O No

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