Question: Please help me with this question Check my work PC Shopping Network may upgrade its modern pool. It last upgraded 2 years ago, when it

Please help me with this question

Please help me with this question Check my work PC Shopping Network

Check my work PC Shopping Network may upgrade its modern pool. It last upgraded 2 years ago, when it spent $110 million on equipment with an assumed life of 5 years and an assumed salvage value of $20 million for tax purposes. The firm uses straight-line depreciation. The old equipment can be sold today for $80 million. A new modern pool can be installed today for $150 million. This will have a 3-year life and 1 will be depreciated to zero using straight-line depreciation. The new equipment will enable the rm to increase sales by $24 million points per year and decrease operating costs by $12 million per year. At the end of 3 years, the new equipment will be worthless. Assume the firm's tax rate is 30% and the discount rate for projects of this sort is 8%. Required: 3. What is the net cash flow at time 0 if the old equipment is replaced? (Negative amounts should be indicated by a minus sign. Do Skipped . . . . . . . not round Intermediate calculations. Enter your answer In millions rounded to 2 deCImal places.) b. What are the incremental cash flows in years (i) 1; (ii) 2; (iii) 3? (Do not round intermediate calculations. Enter your answer in eBook millions rounded to 2 decimal places.) c. What is the NPV of the replacement project? (Do not round intermediate calculations. Enter the NPV in millions rounded to 2 PM decimal places.) d. What is the IRR of the replacement project? (Do not round intermediate calculations. Enter the IRR as a percent rounded to 2 decimal places.) Net cash ow million Incremental cash ow NPV IRR million per year million % P-PP'P

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