Question: is using the webc Use the following to answer the next two questions: The managers of Poncho Parts, Inc. plan to manufacture engine blocks for

 is using the webc Use the following to answer the next

is using the webc Use the following to answer the next two questions: The managers of Poncho Parts, Inc. plan to manufacture engine blocks for classic cars from the 1960s era. They expect to sell 250 engine blocks annually for the next 5 years at a sales price of $3,000 per block. The necessary foundry and machining equipment will cost a total of $800,000 and will be depreciated on a straight-line basis to zero over the project's life. The firm expects to be able to sell the manufacturing equipment for $150,000 at the end of the project. Labor and materials costs total $500 per engine block and fixed costs are $125,000 per year. Assume a 35% tax rate and a 12% discount rate. D Question 39 9 pts What is the expected after-tax cash flow (salvage value) to the firm when the equipment is sold in year 5? O $65.000 O $120,125 O $115,000 O $97,500 O $100,000 D Question 40 9 pts What is the NPV of this project? O $628,744 O $260,769 O $521,309 O $401,187 O $644,678 Guard Noticed Sum

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!