Eggz, Inc., is considering the purchase of new equipment that will allow the company to collect loose
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Eggz, Inc., is considering the purchase of new equipment that will allow the company to collect loose hen feathers for sale. The equipment will cost $525,000 and will be eligible for 100 percent bonus depreciation. The equipment can be sold for $35,000 at the end of the project in five years. Sales would be $348,000 per year, with annual fixed costs of $56,000 and variable costs equal to 35 percent of sales. The project would require an investment of $40,000 in NWC that would be returned at the end of the project. The tax rate is 22 percent and the required return is 9 percent. What is the project’s NPV?
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Related Book For
Fundamentals Of Corporate Finance
ISBN: 9781265553609
13th Edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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