Question: 8- Temple Corp. is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would

8- Temple Corp. is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated by the straight-line method over its 3-year life, and would have a zero salvage value. No change in net operating working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's NPV? Do not round the intermediate calculations and round the final answer to the nearest whole number.

Risk-adjusted WACC	10.0%
Net investment cost (depreciable basis)	$65,000
Straight-line depr. rate	33.3333%
Sales revenues, each year	$71,000
Annual operating costs (excl. depr.)	$25,000
Tax rate	35.0%

a. $30,190

b. $28,215

c. $25,393

d. $25,958

e. $23,136

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

8) Temple Corp. is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life. Under the new tax law, the equipment used in the project is eligible...

please solve & explain formulas. (dont use excel, only TI-84 Tvm feature if need be) Temple Corp. is considering a new project whose data are shown below. The equipment that would be used has a...

1. You work for Whittenerg Inc., which is considering a new project whose data are shown below. Under the new tax law, the equipment used in the project is eligible for 100% bonus depreciation, so it...

1. Your company is considering a new project whose data are shown below. What is the projects Year 1 cash flow? Sales revenue, each year $21,750 Depreciation $8,000 Other operating costs $12,000 Tax...

Tex Mex Food Company is considering a new salsa whose data are shown below. The equipment to be used would be depreciated by the straight-line method over its 3-year life and would have a zero...

answer all please i will like As a member of UA Corporation's financial staff, you must estimate the Year 1 cash flow for a proposed project with the following data. Under the new tax law, the...

all question go together plz answer all Which of the following statements is CORRECT? a. Under bonus depreciation, higher depreciation charges occur att = 0, and this increases the initial investment...

18. You were hired as a consultant, to Giambono Company, whose target capital structure is 40% debt, 20% preferred, and 48% common equity. The after-tax cost of debt is 6.0bs, the cost of preferred...

Your company, RMU Inc., is considering a new project whose data are shown below. Under the new tax law, the equipment used in the project is eligible for 100% bonus depreciation, so it will be fully...

14 Temple Corp. is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated by the straight-line method over its 3-year life,...

The Ford Corporation is looking at opening a small manufacturing facility in Richman to produce auto parts. The business is expected to last for 6 years. They expect start- up costs of $4,500,000....

Computation of Net Income Presented below are changes in all account balances of Jackson Furniture Co. during the current year, except for retained earnings. Instructions Compute the net income for...

Currently, you can purchase either 1 2 3 Canadian dollars or 1 1 , 4 5 0 Japanese yen per $ 1 0 0 . What is the yen per Canadian dollar cross - rate?

The User-Kernel Boundary What test does the kernel perform when receiving the address of a buffer (e.g., to write the contents of a file to) as a system call parameter?