Yetmana is considering an investment that will have the following sales variable costs, and find operating costa Year 1 Unit sales 3.500 Sale price $38.50 Variable cost per unit 322.44 Reed operating costs except depredation $37,000 Accelerated depreciation rate Year 2 4,000 529 $22.55 $37.500 5% Year 3 Year 200 4.250 540:15 11.55 R3.67 23. 33,120 79,560 154 7 This project will require an investment of $15,000 in new wipment. The coupement will have no salvan value at the end of the project for at e. Yatman pays a constant tax rate of 40%, and has a weighted average cost of capital (WACC) 11. Determine what the project met punt wale would be when using accelerated depreciation Determine what the project's net present vitut (V) would be when using accelerated depreciation. (Note: Round your intermediate cautions to the nearest whole number O 0,090 $51,719 $4,566 TR the nearest whole number) o cartoons O $43,099 $51,719 $49,564 $38.789 Now determine what the project's NPV would be when using tight-line depreciation Using the depreciation method will result in the highest NPV for the project. No other firm would take on this project if Yeatman turn it down. How much should Watman reduce the NPV of this project discovered that the project would reduce one of its division's net after tax cash flows by $500 for each year of the four-year project? O $1,551 O $1,700 O $1,163 $1.118 2. Analysis of an expansion project Companies invest in expansion projects with the expectation of increasing the samnings of its business, Consider the case of Yeatman Co. Yeatman Co. is considering an investment that will have the following sales, variable costs, and foed operating costs: Year 2 Year 4 Year 1 3,500 Unit sales Sales price Variable cost per unit Fixed operating costs except depreciation Accelerated depreciation rate $38.50 $22.34 4.000 $39.88 $22.85 $37.500 4596 Year 3 4,200 $40.15 $23.67 $38,120 15% 4.250 $41.55 $23.87 $39,560 $37.000 33% 2% This project will require an investment of $15,000 in new equipment. The equipment will have no salvage value at the end of the project's four-year life. Yeatman pays a constant tax rate of 40%, and it has a welghted average cost of capital (WACC) of 11%, Determine what the project's net present value (NPV) would be when using accelerated depreciation This project will require an investment of $15,000 in new equipment. The equipment will have no salvage value at the end of the project's four year life. Yeatman pays a constant tax rate of 40%, and it has a weighted average cost of capital (WACC) of 11%. Determine what the project's not present Value (NPV) would be when using accelerated depreciation. Determine what the project's net present value (NAP) would be when using accelerated depreciation. (Note. Round your intermediate calculations to the nearest whole number) $43,099 O $51,719 O $49,564 O $38,789 Now determine what the project's NPV would be when using straight-line depreciation. Using the depreciation method will result in the highest NPV for the project No other form would take on this project if Yeatman turns it down. How much should Yetman reduce the NPV of this project if it discovered that this project would reduce one of its division's net alter-tax cash flows by $500 for each year of the four-year project? 151.551 the nearest whole number) $43,099 $51,719 $49,564 $38,789 Now determine what the project's NPV would be when using straight-line depreciation Using the depreciation method will result in the highest Nov for the project No other firm would take on this project if Yeatman turns it down. How much should Yeatman reduce the NPV of this project if at discovered that this project would reduce one of its division's net after-tax cash flows by $500 for each year of the four-year project? O 31,551 0 $1,706 $1,163 $1,318 2. Analysis of an expansion project Companies invest in expansion projects with the expectation of increasing the earnings of its business. Consider the case of Yeatmanco: Yeatman Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs: Year 2 Year 3 4,200 Year 4 4,250 Year 1 3,500 $38.50 $22.34 Unit sales Sales price Variable cost per unit Fixed operating costs except depreciation Accelerated depreciation rate 341.55 4,000 $39.88 $22.85 $37,500 45% $40.15 $23.67 $38,120 15% $37,000 33% $23.87 $39,560 7% This project will require an investment of $15,000 in new equipment. The equipment will have no salvage value at the end of the project's four-year life. Yatman pays a constant tax rate of 40%, and it has a weighted average cost of capital (WACC) of 11%. Determine what the project's not present who una carated depreciation $38.50 Variable cost per unit Forced operating costs except deprecation Accelerated depreciation rate $22.34 $37,000 33% $39.88 $22.85 $37,500 45% $10.15 $41.55 $23.67 $23.87 $38,120 $39,560 15% 7% This project will require an investment of $15,000 in new equipment. The equipment will have no salvage value at the end of the project's four-year life. Yeatman pays a constant tax rate of 40%, and it has a weighted average cost of capital (WACC) of 11%, Determine what the project's net present value (NPV) would be when using accelerated depreciation. Determine what the project's net present value (NPV) would be when using accelerated depreciation. (Note: Round your intermediate caliculations to the nearest whole number) O $43,099 O $51,719 $49,564 $38,789 Now determine what the project's NPV would be when using straight-line depreciation. $51,719 549,564 $38,789 Now determine what the project's NPV would be when using straight-line depreciation. Using the depreciation method will result in the highest NPV for the project. No other firm would take on this projectif Yestman turns it down. How much should Yatman reduce the NPV of this project if it discovered that this project would reduce one of its division's net after-tax cash flows by $500 for each year of the four-year project? $1,551 O $1,700 O $1,163 $1,318 Save & Continue Continue without saving
