Question: 6. Problem 12.08 (New Project Analysis) A-Z ebook You must evaluate the purchase of a proposed spectrometer for the R&D department. The purchase price of
6. Problem 12.08 (New Project Analysis) A-Z ebook You must evaluate the purchase of a proposed spectrometer for the R&D department. The purchase price of the spectrometer including modifications is $170,000, and the equipment will be fully depreciated at the time of purchase. The equipment would be sold after 3 years for 567,000. The equipment would require a $5,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $67,000 per year in before tax tabor costs. The firm's marginal federal-plus-state tax rate is 25%. What is the initial investment outlay for the spectrometer after bonus depreciation is considered that is, what is the Year project cash flow? Enter your answer as a positive value. Round your answer to the nearest dollar 5 O b. What are the project's annual cash flows in Years 1, 2, and 37 Do not round intermediate calculations. Round your answers to the nearest dollar Year 115 Year 2:5 Year 3:5 IT the WACC IS 13%, should the spectrometer be purchased? -Select
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