Question: answer is needed as soon as possible please Kanada lumber wants to take advantage of the hot lumber market. It has invested a lot of

answer is needed as soon as possible please
answer is needed as soon as possible please Kanada lumber wants to
take advantage of the hot lumber market. It has invested a lot
of time and money into researching the viability of the new "got

Kanada lumber wants to take advantage of the hot lumber market. It has invested a lot of time and money into researching the viability of the new "got lumber" project. To secure exclusivity to a proprietary design of new logging equipment the CEO of Kanada Lumber has placed a non- refundable deposit of $150,000. The cost of the deposit has been expensed. If the "got lumber" equipment is purchased it would require an immediate capital outlay of $999,000. The supplier has also advised that a significant upgrade will be available at the end of year 3. The upgrade will cost an additional $200,000. If they go ahead with the project they will also commit to the purchase of the upgrade. Kanada Lumber will use a vacant piece of land they currently have possession of to house the equipment. Kanada Lumber is aware they could lease this land to a local cattle farm for $75,000 per year. The equipment will need to go through an initial testing period of one year and then be put into use immediately, During years 1 to 3 cash expenses will be incurred in the amount of $200,000. The project will generate yearly revenues of $750,000 for years 2 - 12 inclusive. Cash Kanada Lumber will use a vacant piece of land they currently have possession of to house the equipment. Kanada Lumber is awa te they could lease this land to a local cattle farm for $75,000 per year. The equipment will need to go through an initial testing period of one year and then be put into use immediately. During years 1 to 3 cash expenses will be incurred in the amount of $200,000. The project will generate yearly revenues of $750,000 for years 2 -12 inclusive. Cash expenses would be reduced to $200,000 per year after the upgrade and will remain at that amount until the end of the project in year 12. The project will require $60,000 in working capital to operate at its peak performance. Due to the nature of the project a safety department will be required. Initial costs to setup the department will be $30,000 and will require the hiring of a safety officer at $35,000 per year for the duration of the project. All the equipment could be salvaged for $50,000 when the The project will require $60,000 in working capital to operate at its peak performance. Due to the nature of the project a safety department will be required. Initial costs to setup the department will be $30,000 and will require the hiring of a safety officer at $35,000 per year for the duration of the project. All the equipment could be salvaged for $50,000 when the project is completed at the end of year 12. Additional information CCA Rate: 30% Tax Rate: 32% WACC: 15% Required: Using the NPV approach, determine if Megalodon should proceed with this investment? Show all of your calculations

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