Use the following data to answer Questions 1 through 14: Fox Central Co. is a manufacturing company which is considering the purchase of a new equipment. The below given summarizes all the information related to the equipment: -Equipment's price: $180,000 - Shipping: $20,000 Payment to find a good place to install the equipment: $30,000 Useful Life: 4 years -Depreciation Method: MACRS - 3 year class -Total Revenues/year: $100,000 Operating costs (Excluding Depreciation)/year: $25,000 Salvage Value: $10,000 -Increase in Current Asset: $23,000 - Increase in Current liabilities (Except N/P): $8,000 -WACC: 9% Tax rate: 40% Note: The MACRS rates are 33%, 45%, 15%, and 7% respectively, 1. The net working capital (NWC) equals: * 4 points O A. $8,000 B. $15,000 O C. $31,000 O D. $23,000 O E. None of the above 2. The base price of the equipment equals: 5 points O A $200,000 O B. $160,000 C. $180,000 D. $230,000 O E. None of the above 3. What is the net cost of the equipment for capital budgeting purposes? * 4 points O A $195,000 O B. $223,000 O C. $208,000 O D. $215,000 O E. None of the above * 4. The depreciation expense for the 1st year is: 4 points O A. $40,000 O B. $66,000 O C. $75,900 O D. $90,000 O E. None of the above 5. The depreciation expense for the 2nd year is: 4 points O A. $103,500 O B. $66,000 O C. $80,000 O D. $90,000 O E. None of the above 4 points 6. The depreciation expense for the 3rd year is: * O A. $30,000 O B. $34,500 C. $66,000 O D. $14,000 O E. None of the above 7. The depreciation expense for the 4th year is: * 4 points O A $30,000 O B. $7,000 OC. $14,000 OD $16,100 O E. None of the above 8. The after-tax Cash Flow for the 1st year is: 5 points O A $65,000 O B. $71,400 O C.$111,000 O D. $75,360 O E. None of the above 9. The after-tax Cash Flow for the 2nd year is: 5 points A $85,000 B. $111,000 O C. $81,000 O D. $86,400 O E None of the above 10. The after-tax Cash Flow for the 3rd year is: * 5 points O A. $57,000 B. $58,800 C. $61,000 O D. $87,000 O E. None of the above 11. The after-tax Cash Flow for the 4th year is: 5 points O A. $57,000 B. $40,000 O C. $50,600 O D. $51,440 E None of the above 4 points 12. The Book Value of the equipment at termination is: O A. SO O B. $10,000 O C. $15,000 D. $25,000 E. None of the above 5 points 13. The Terminal Value (TV) is: A $25,000 B. $21.000 C. $10,000 D. $70,000 E. None of the above 14. The NPV value of the project is: 5 points A $10,460 B. $13,418 C. $41,437 O D. $49,258 O E. None of the above nana 25
