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Your corporation is considering replacing older equipment. The old machine is fully depreciated and cost $ 5 4 , 8 7 6 . 0 0
Your corporation is considering replacing older equipment. The old machine is fully depreciated and cost $ seven years ago. The old equipment currently has no market value. The new equipment cost $ The new equipment will be depreciated to zero using straightline depreciation for the fouryear life of the project. At the end of the project the equipment is expected to have a salvage value of $ The new equipment is expected to save the firm $ annually by increasing efficiency and cost savings. The corporation has tax rate of and a required return on capital of Please enter your answers with two decimal places, as these are dollar amounts.
A What is the total initial cash outflow? Show as a negative number: $
B What are the estimated annual operating cash flows? $
C What is the terminal cash flow? $
D What is the NPV for this project? $
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