Answered step by step
Verified Expert Solution
Question
1 Approved Answer
using a finance calculator 6. Donuts R Done wants to expand its donut business by purchasing a new donut machine that costs $500,000 and will
using a finance calculator
6. Donuts R Done wants to expand its donut business by purchasing a new donut machine that costs $500,000 and will be depreciated on a straight-line basis to $0 over the 5 -year life of this project. It is estimated that this machine will have a scrap value of $20,000 after five years. This project requires an additional $22,000 for net working capital. The operating cash flows projected for this project are $150,000 a year, the discount rate is 10 percent and the tax rate is 30 percent. What is the net present value of this project? (ANSWER $68,971.18 ) What is the internal rate of return for this project? (ANSWER 14.90\%) Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started