FITCO is considering the purchase of new equipment. The equipment costs $349000, and an additional $104000 is
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FITCO is considering the purchase of new equipment. The equipment costs $349000, and an additional $104000 is needed to install it. The equipment will be depreciated straight-line to zero over a 5-year life. The equipment will generate additional annual revenues of $265000, and it will have annual cash operating expenses of $84000. The equipment will be sold for $84000 after 5 years. An inventory investment of $70000 is required during the life of the investment. FITCO is in the 40 percent tax bracket, and its cost of capital is 10 percent. What is the project NPV?
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Accounting Texts and Cases
ISBN: 978-1259097126
13th edition
Authors: Robert Anthony, David Hawkins, Kenneth Merchant
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