Question: Please answer carefully Data for all Milton Industries problems are the same. Milton Industries wants to purchase new equipment that has a quoted price of

Please answer carefully

Please answer carefully Data for all Milton

Data for all Milton Industries problems are the same. Milton Industries wants to purchase new equipment that has a quoted price of $1,000,000. Milton estimates an additional cost of $75,000 will be needed today to have the equipment modified, shipped, and installed. The purchase of this additional equipment will require Milton to invest an estimated $85,000 in net working capital upfront, and this investment should be recovered when Milton sells the equipment. If purchased, the equipment will be employed for a total of six years, and then sold for an estimated $780,000. The equipment will be depreciated straight-line on a six-year schedule. During each of the years that the equipment is in service, it is expected to boost Milton's sales revenue by $398,000 though annual operating costs (other than depreciation) are also expected to be higher, to the extent of $94,000. Milton faces a marginal tax rate of 35%, and its cost of capital is 10.5%. The NPV of this project will be zero if Milton's cost of capital were: 17.14% 15.87% 10.55% 13.15% 14.84%

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