Amount of Investment $ 300,000 Annual cash flow revenue $ 84,000 Annual cash flow expenses $ 58,000
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Amount of Investment $ 300,000 Annual cash flow revenue $ 84,000 Annual cash flow expenses $ 58,000 Life of the project (in years) 10 Scrap value of the equipment at the end of the project $ 18,000 Hollings Company's corporate tax rate 31.00% Hollings Company's weighted average cost of capital 11.50% CCA rate on the new equipment 25.00% Required
1) Calculate the net present value of this project.
2) Calculate the profitability index. 3) Should Hollings proceed with the new project?
Related Book For
College Mathematics for Business Economics Life Sciences and Social Sciences
ISBN: 978-0321614001
12th edition
Authors: Raymond A. Barnett, Michael R. Ziegler, Karl E. Byleen
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