o go 6. Whatever is considering purchasing equipment that will cost $90,000. Shipping and installation would...

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o go 6. Whatever is considering purchasing equipment that will cost $90,000. Shipping and installation would be an additional $10,000, the new equipment will be depreciated using straight-line over 5 years. The marginal tax rate of Whatever Company is 35%. Annual revenue is expected to increase by $15,000 in the first year, then continue to increase by an additional $2,000 each year for the remainder of the project's life. Annual operating costs are expected to increase the first year by $10,000, after that, they will decrease by $5,000 each year for years 2-5 (AO-5,000 year 2, 3, 4, and 5). Find the initial outlay and annual net cash flows. Find NPV assuming a 11% cost of capital. # → o go 6. Whatever is considering purchasing equipment that will cost $90,000. Shipping and installation would be an additional $10,000, the new equipment will be depreciated using straight-line over 5 years. The marginal tax rate of Whatever Company is 35%. Annual revenue is expected to increase by $15,000 in the first year, then continue to increase by an additional $2,000 each year for the remainder of the project's life. Annual operating costs are expected to increase the first year by $10,000, after that, they will decrease by $5,000 each year for years 2-5 (AO-5,000 year 2, 3, 4, and 5). Find the initial outlay and annual net cash flows. Find NPV assuming a 11% cost of capital. # →

Answer rating: 100% (QA)

To calculate the initial outlay we need to add the cost of the equipment shipping and installation a... View the full answer