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You are evaluating a project for The Dogs, that involves the purchase of a new dog biscuit making muchine. The project. has a three yeor
You are evaluating a project for The Dogs, that involves the purchase of a new dog biscuit making muchine. The project. has a three yeor Me and you estimate the project witl increase revenues by $160,000 and weit increase costs by $26,000 each yeat. The project requires an initial investment of $120,000 which is depreciated on a stralght-line bosis to zero over the 3 year project life. The machine will be sold at the end of the project for $35.000. The initial net working capital investment required for this project is $18,000 which will be recovered at the end of the project's life. The tax rate is 25% and the required return on the project is 10%. What is the after-tax salvage value of the mochine that will be purchased for this project? Multiple Choice $25,000 $8,750 $35,000 526.250
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