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you must evaluate the purchase spectrometer of R&D department. The purchase price of the spectrometer including modifications is 90,000 and the equipment will be fully
you must evaluate the purchase spectrometer of R&D department. The purchase price of the spectrometer including modifications is 90,000 and the equipment will be fully depreciated at the time of purchase. the equipment would be sold after 3 years for 35,000. the equipment would require a 9,000 increase in net operating working capital. the project would have no effect on revenues but it should save the firm 46,000 per year in before tax labor costs. the firm marginal federal plus sate tax rate is 25%
a. what is the initial investment outlay for the spectrometer after bonus depreciation is considered that is what is the year 0 project cash flow? enter your answer as a postive value. round your answer nearest dollar.
B. what ars the project annual cash flows in years 1,2, and 3? do not round intermediate calculations. round your answer to the nearest $.
if the wacc is 14% should the spectrometer be purchased.
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