Your company has been doing well, reaching $1.02 million in eamings, and is considering launching a new product. Designing the new product has already cost $425.000 The company estimates that I will sel824.000 units per year for $3 04 per unit and variable non-labor costs will be 11.06 per unit Production will end after year 3. Now equipment costing $1.07 million will be required. The equipment will be depreciated to zero using the 7-year MACRS schedude You plan to sell the equipment for book value at the end of year 3. Your current level of working capital is $309.000 The new product will require the working capital to increase to a level of $172,000 immediately the to $391,000 in year t, in year 2 the level will be $357,000, and finally in year 3 the level will return to $309.000. Your tax cale is 21% The discount rate t this project is 98% De the capital budgeting analysis for this project and calculate its NPV Note Assume that the equipment is put into use in year 1. Design already happened and is Omelevant) (Select from the drop-down menu) According to the 7-year MACRS schedule, depreciation in year 1 will be 5 (Hound to the nearest dollar) Depreciation in year 2 will be (Round is the nearest dollar) Depreciation in year 3 wit be 1 (Round to the nearest dollar Complete the capital budgeting analysis for this project below Year 0 Sales Cet of Goods Sold Gross Prof (Round to the nearest dula) Year 1 Year 2 Year 3 Submit quiz Your company has been doing well, reaching $1.02 million in eamings, and is considering launching a new product Designing the new product has already cost $455.000 The company estimates that will sel 824,000 unts per year for $3.04 per unit and variable non labor costs will be $1.06 per unit Production will end after year 3. New equipment costing $107 million will be required The epipment will be depreciated to zero uning the 7 year MARS schedule You plan to sell the equipment for book value at the end r $391,000 in year 1, in year 2 the level will be $357,000, and finally in year 3 the level will return to $309.000 Your tax rate is 21% The discount rate for this project is 90% Do the capital budgeting analysis for t year 3. Your current level of working capital is $309.000. The new product will require the working capital to increase to a level of $372.000 immediately, the to calculate is NPV project and Note Assume that the equipment is put into use in year Cost of Goods Sold Gross Prat -Depreciation EBIT S $ Tax Incremental Earnings S Depreciation Incremental Working Capital Capital Investment Incremental Free Cash Flow The NPV of the project is (Round to the nearest dollar) Next Your company has been doing well, reaching $1.02 million in earnings, and is considering launching a new product. Desig year for $3.04 per unit and variable non-labor costs will be $1.06 per unit. Production will end after year 3. New equipment schedule. You plan to sell the equipment for book value at the end of year 3. Your current level of working capital is $309,0 $391,000 in year 1, in year 2 the level will be $357,000, and finally in year 3 the level will return to $309,000. Your tax rate calculate its NPV. Note: Assume that the equipment is put into use in year 1. Cost of Goods Sold Gross Profit - Depreciation EBIT - Tax Incremental Earnings + Depreciation - Incremental Working Capital Capital Investment Incremental Free Cash Flow The NPV of the project is S 60 FA E9 CA $ 12 14 (Round to the nearest dollar) Your company has been doing well, reaching $1.02 million in earnings, and is considering launching a new product. Designing the m year for $3.04 per unit and variable non-labor costs will be $1.06 per unit. Production will end after year 3. New equipment costing S schedule. You plan to sell the equipment for book value at the end of year 3. Your current level of working capital is $309,000. The r $391,000 in year 1, in year 2 the level will be $357,000, and finally in year 3 the level will return to $309,000. Your tax rate is 21%. Ti calculate its NPV Note: Assume that the equipment is put into use in year 1. Design already happened and is (irrelevant) (Select from the drop-down menu.) According to the 7-year MACRS schedule, depreciation in year 1 will be S (Round to the nearest dollar) Depreciation in year 2 will be $ (Round to the nearest dollar.) Depreciation in year 3 will be $ (Round to the nearest dollar) Complete the capital budgeting analysis for this project below: (Round to the nearest dollar) Year 0 Year 1 Year 2 Sales $ Cost of Goods Sold Gross Profit Nanreciation $ Year 3 Your company has been doing well, reaching $1.02 million in earnings, and is considering launching a new product. Designin year for $3.04 per unit and variable non-labor costs will be $1.06 per unit. Production will end after year 3. New equipment co schedule. You plan to sell the equipment for book value at the end of year 3. Your current level of working capital is $309,000 $391,000 in year 1, in year 2 the level will be $357,000, and finally in year 3 the level will return to $309,000. Your tax rate is calculate its NPV. Note: Assume that the equipment is put into use in year 1. CCC Design already happened and is (irrelevant) (Select from the drop-down menu) According to the 7-year MACRS schedule, depreciation in year 1 will be S Depreciation in year 2 will be $ (Round to the nearest dollar) Depreciation in year 3 will be $ (Round to the nearest dollar) Complete the capital budgeting analysis for this project below: (Round to the nearest dollar) Year 1 Year 0 Year 2 Sales $ $ - Cost of Goods Sold Grace Denifit (Round to the nearest dollar) Year 3 ng a new product. Designing the new product has already cost $485,000. The company estimates that it will sell 824,000 units per year 3. New equipment costing $1.07 million will be required. The equipment will be depreciated to zero using the 7-year MACRS working capital is $309,000. The new product will require the working capital to increase to a level of $372,000 immediately, then te $309,000. Your tax rate is 21%. The discount rate for this project is 9.8%. Do the capital budgeting analysis for this project and rest dollar) Year 3
