USE THE INFORMATION BELOW FOR THE

USE Till: INI'ORNI,UION nrrow QUESTION. You are analyzing the purchase of new equipment. Since you are not an expert on this type of equiptnent. you hire a consulting firm to conduct feasibility studies and make recommendations. You asked your staff to collect all the information and they have made the intOrmation available in the table below: IITMS Equi ment Purchase price Modification installation 01 the e ui ment Expected market value at the end of ro'ect's life Residual salva e value Ex ted useful lite Annual Depreciation De reciation method Consultation fees charged ror feasibilit stud Net working capital requirement Expected to remain the same throughout the project AND recovered at the end of the eriod. Expected sale with the new equipment Quantity Price er unit Expected manufacturing costs and operating expense with the new equipment without de reciation, Hurdle rate / WACC / Required rate of return for this kind of roect. Tax Amount / Unit SAR SAR 80.000 10.000 28.000 3 YEARS 30.000 Stra- t line over the life of the asset. SAR 1,500 12.000 5292 units 21 45% of total sales CALCULATE THE INCREMENTAL ANNUAL VREE CASH FLOW EOR THE 1ST YEAR or THIS PROJECT. PROVIDE YOUR ANSWER TO THE NEAREST 2 DECIMAL POINTS.