Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

What is the answer to question 14? Thank you Question 14 1 pts Franco is considering the purchase of new equipment. To begin the project,

What is the answer to question 14? Thank you
image text in transcribed
Question 14 1 pts Franco is considering the purchase of new equipment. To begin the project, the equipment costs $320,000, and an additional $130.000 is needed to install it. An inventory investment cost of $74.000 is also required for the project. The equipment will be depreciated straight- line to zero over a five-year life. The equipment will generate additional annual revenues of $280,000, and it will have annual cash operating expenses of $87,000. The equipment will be sold for $80.000 after five years. Franco is in the 30 percent tax bracket and its cost of capital is 12 percent. What is the NPV of this project? $134,099.71 $127,903.12 $92,036.55 $86,664.52

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

School Finance Elections

Authors: Don E. Lifto, Bradford J. Senden, Daniel A. Domenech

2nd Edition

1607091488, 978-1607091486

More Books

Students also viewed these Finance questions

Question

What lessons in intervention design, does this case represent?

Answered: 1 week ago