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you must evaluate the purchase of a spectrometer for the R&D department. the base price is 140000 and it would cost another 30000 to modify
you must evaluate the purchase of a spectrometer for the R&D department. the base price is 140000 and it would cost another 30000 to modify the equipment for the special use of the firm. the equipment falls into the Marcs 3 year class and would be sold after 3 years for 60000. the applicable depreciation rates are 33%,45%,15%, and 7%. the equipment would require an 8000 increase in net operating working capital. the project would have no effect on revenues but it should save the firm 50000 per year in before tax labor costs. the firms marginal federal plus state tax rate is 40%. the firms wacc is 12%. given the information in the problem. liquidation of net operating working capital: what is the projects cash flow from the liquidation of net operating working capital in year 3? what is the projects terminal cash flow for year 3(not the operating cash flow)? what is the projects net present value? what is the projects internal rate of return? what is the projects modified internal rate of return?
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