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Using the following: US $84,000 Meter Reading 26,109 Hours Serial # KPZ00698 Cost of Capital 10% (due to age of equipment) Hurdle rate 10% Cash
Using the following:
US $84,000
Meter Reading 26,109 Hours
Serial # KPZ00698
Cost of Capital 10% (due to age of equipment)
Hurdle rate 10%
Cash Flow $10,500 per year for 10 years
Depreciation 40,000 hours, Salvage $4,000, annual hours 4,000
Company cannot use financing sources available under its cost of capital average with local banks and lendin companies on this age of equipment. Therefore the cost of capital is higher. 2
Find the Following:
Initial Investment |
Net Annual Income |
Net Annual Cash Flow |
Project Life |
Depreciation Annual |
Accounting Rate of Return |
Payback period |
NPV |
Profitability index |
NOTE* You may not need to use all the info given
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