Question: 4- URGENT!! PLEASE HELP!! When inputting an answer, round your answer to the nearest 2 decimal places. If you need to use a calculated number
4- URGENT!! PLEASE HELP!!
When inputting an answer, round your answer to the nearest 2 decimal places. If you need to use a calculated number for further calculations, DO NOT round until after all calculations have been completed. For the final answer, Round to 2 decimal places.
| Q4) Your corporation is considering replacing older equipment. The old machine is fully depreciated and cost $41,729.00 seven years ago. The old equipment currently has no market value. The new equipment cost $55,590.00 . The new equipment will be depreciated to zero using straight-line depreciation for the four-year life of the project. At the end of the project the equipment is expected to have a salvage value of $29,638.00 . The new equipment is expected to save the firm $23,514.00 annually by increasing efficiency and cost savings. The corporation has tax rate of 38.59% and a required return on capital of 12.58% . |
| a) What is the total initial cash outflow? (show as negative number - 2.5 Points) |
| b) What are the estimated annual operating cash flows? (2.5 Points) |
| c) What is the terminal cash flow? (2.5 Points) |
| d) What is the NPV for this project? (2.5 Points) |
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