Your firm is considering purchasing some new equipment. The new equipment will cost $3.5 million plus $310 thousand shipping and $15.0 thousand for installation. An additional amount of net working capital of $134,0 thousand is necessary to get the full use of the equipment. If this new equipment is purchased, an old set of equipment with book value of $309.0 thousand can be sold for $325.0 thousand. The original purchase price (depreciable base) of the old equipment (that will be sold at time - 0) was $500.0 thousand. The new equipment is expected to generate additional revenues of $289.0 thousand per year for the 10-year economic life of the equipment. The new equipment will be more efficient than the existing equipment, thus annual operating expenses will be lower by $63.0 thousand per year. The new equipment will be depreciated on a straight-line basis to zero over a 10-year period. Assume that at the end of year 10 the new equipment can be sold for $266.0 thousand and the associated net working capital will be recaptured. The marginal income tax rate is 37.0%, the capital gains tax rate is 12.3%, and the firm's discount rate is 8.6%. Calculate the NPV of the project. Do not round your intermediate calculations. Save any rounding until expressing your final answer. Express your answer in thousands to the nearest 0.1 thousand dollar (e-3. $155,100 dollars would be expressed as 155.1 as your answer). Your firm is considering purchasing some new equipment. The new equipment will cost $3.5 million plus $310 thousand shipping and $15.0 thousand for installation. An additional amount of net working capital of $134,0 thousand is necessary to get the full use of the equipment. If this new equipment is purchased, an old set of equipment with book value of $309.0 thousand can be sold for $325.0 thousand. The original purchase price (depreciable base) of the old equipment (that will be sold at time - 0) was $500.0 thousand. The new equipment is expected to generate additional revenues of $289.0 thousand per year for the 10-year economic life of the equipment. The new equipment will be more efficient than the existing equipment, thus annual operating expenses will be lower by $63.0 thousand per year. The new equipment will be depreciated on a straight-line basis to zero over a 10-year period. Assume that at the end of year 10 the new equipment can be sold for $266.0 thousand and the associated net working capital will be recaptured. The marginal income tax rate is 37.0%, the capital gains tax rate is 12.3%, and the firm's discount rate is 8.6%. Calculate the NPV of the project. Do not round your intermediate calculations. Save any rounding until expressing your final answer. Express your answer in thousands to the nearest 0.1 thousand dollar (e-3. $155,100 dollars would be expressed as 155.1 as your answer)
