Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

XYZ is considering buying a new, high efficiency interception system. The new system would be purchased today for $45,500.00. It would be depreciated straight-line to

image text in transcribed
XYZ is considering buying a new, high efficiency interception system. The new system would be purchased today for $45,500.00. It would be depreciated straight-line to $0 over 2 years. In 2 years, the system would be sold for an after-tax cash flow of $13,300.00. Without the system, costs are expected to be $100,000.00 in 1 year and $100,000.00 in 2 years. With the system, costs are expected to be $75,700.00 in 1 year and $67,000.00 in 2 years. If the tax rate is 46.60% and the cost of capital is 8.40%, what is the net present value of the new interception system project? $14936.04 (plus or minus $50 ) $11588.11 (plus or minus $50 ) $12870.98 (plus or minus $50 ) $15699.50 (plus or minus $50 ) None of the above is within $50 of the correct

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

Step: 3

blur-text-image

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

Understanding Decentralized Finance How DeFi Is Changing The Future Of Money

Authors: Rhian Lewis

1st Edition

1398609390, 978-1398609396

More Books

Students also viewed these Finance questions

Question

From your own research, select

Answered: 1 week ago