Question: Flotida Car Wash is considering a new project whose data are chown below. The equipanent to be used has a 3 -year tax life. Under
Flotida Car Wash is considering a new project whose data are chown below. The equipanent to be used has a 3 -year tax life. Under the new tax law, the equipment is eligible for 100 / bonus depreciation, so it will be fully depreciated at t=0. At the end of the projectr 3 -ytar life, it would have xero salvage value. No change in net operating working capital (NOWC) woald be required for the project. Revenues and operating costs will be constant over the project's life, and this is juat one of the firm't many projects, 10 any losses on it can be used to offset profits in other units. If the number of cars washed declined by 400 . from the expected level, by how much would the project's NpV change? (Hint: Note that cauh flows are constant at the Ycar 1 level, whatever that level is.) Do not round the ietermediate calculations and round the final answer to the nearest whole number. Tax rate 25.046 a. 538,803 b. 943,339 c. 528,573 d. 540,567 e. 340,920
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