Question: Excel spreadsheet is required. Thanks for helping me out! FX, Inc. is a volume manufacturer of high technology automotive mirrors (including cell link and voice
Excel spreadsheet is required. Thanks for helping me out!
FX, Inc. is a volume manufacturer of high technology automotive mirrors (including cell link and voice activation). FX is looking to expand its operations to add a second product. The equipment investment cost for this new operation is $125,000. The project falls under a 7-year MACRS class life and the company estimates that the salvage value will be $50,000 at the end of the 5-year project. The annual revenue for the new line is $100,000. The annual manufacturing costs are listed below: Labor: $20,000 Materials: $12,000 Maintenance: $8,000 Excel Questions: 1. If the investment can be expensed in the first year, how would this change the NPV? 2. The income tax rate is 40% and the MARR is 15%. Find the interest rate when the company will give up the option to borrow fund. FX, Inc. is a volume manufacturer of high technology automotive mirrors (including cell link and voice activation). FX is looking to expand its operations to add a second product. The equipment investment cost for this new operation is $125,000. The project falls under a 7-year MACRS class life and the company estimates that the salvage value will be $50,000 at the end of the 5-year project. The annual revenue for the new line is $100,000. The annual manufacturing costs are listed below: Labor: $20,000 Materials: $12,000 Maintenance: $8,000 Excel Questions: 1. If the investment can be expensed in the first year, how would this change the NPV? 2. The income tax rate is 40% and the MARR is 15%. Find the interest rate when the company will give up the option to borrow fund
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