A firm is considering the purchase of a machine which would represent an investment of $24 million,
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A firm is considering the purchase of a machine which would represent an investment of $24 million, and would be depreciated in astraightlinebasis over 6 years. Sales are expected to be $14 million per year, and operating costs 23% of sales. The company is currently paying $3 million in interest per year, has a tax rate of 40%, and a WACC of 10%. What is the company's free cash flow for year 1 of this project?
Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
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