Question
Your company, Dominant Retailer, Inc., is considering a project whose data are shown below.Revenue and cash operating expenses are expected to be constant over the
Your company, Dominant Retailer, Inc., is considering a project whose data are shown below.Revenue and cash operating expenses are expected to be constant over the project's 5 year expected operating life; annual sales revenue is $99,000.00 and cash operating expenses are $49,750.00.The new equipment's cost and depreciable basis is $150,000.00 and it will be depreciated by MACRS as 5 year property.The new equipment replaces older equipment that is fully depreciated but can be sold for $8,000.In addition, the new equipment requires an additional $5,000 of net operating working capital, which can be fully recovered at the end of the project.The new equipment is expected to be sold for $10,750 at the end of the project in year 5.The marginal tax rate is 20.00%.What is the project's Initial Cash Outlay at Year 0?Note:Enter your answer rounded off to two decimal points.Do not enter $ or comma in the answer box.For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.
Using the information from problem 2 on Dominant Retailer, Inc., what is the Year 4 Net Operating Cash Flow?Enter your answer rounded to two decimal places.Do not enter $ or comma in the answer box.For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.
Using the information from problem 2 on Dominant Retailer, Inc., what is the Terminal Year Non-Operating Cash Flow at the end of Year 5?Enter your answer rounded to two decimal places.Do not enter $ or comma in the answer box.For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.
Using the information from problem 2 on Dominant Retailer, Inc., what is the NPV of the Project if Dominant Retailer's WACC is 14.75%? Enter your answer rounded to two decimal places. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.
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