a) What is the CFo (initial outlay) for this project? (without excel)

b) What is the terminal cash flow associated with this project? (without excel)

 

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CURRENT MACHINE Purchased Two Years Ago Purchase Price $120,000 Depreciation using 5-year MACRS (20, 32, 19.2, 11.52, 11.52, 5.76) Salvage Value $37,600 NEW (REPLACEMENT) MACHINE $180,000 $7,500 $15,000 Cost Shipping Facilities Modification Depreciation using 5-year MACRS (20, 32, 19.2, 11.52, 11.52, 5.76) Change in Net Working Capital $10,000 $30,000 $12,000 $8,000 Will increase revenues by Will decrease expenses by Salvage Value at end of six years Company tax rate 34% MARR 10% CURRENT MACHINE Purchased Two Years Ago Purchase Price $120,000 Depreciation using 5-year MACRS (20, 32, 19.2, 11.52, 11.52, 5.76) Salvage Value $37,600 NEW (REPLACEMENT) MACHINE $180,000 $7,500 $15,000 Cost Shipping Facilities Modification Depreciation using 5-year MACRS (20, 32, 19.2, 11.52, 11.52, 5.76) Change in Net Working Capital $10,000 $30,000 $12,000 $8,000 Will increase revenues by Will decrease expenses by Salvage Value at end of six years Company tax rate 34% MARR 10%

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1 cost of new machine 180000 shipping cost 7500 facilities ... View the full answer