Question: Problem 1 Sugar Land Company is considering adding a new line product and the capital budgeting analysis is being conducted by a MBA student. The
Problem 1 Sugar Land Company is considering adding a new line product and the capital budgeting analysis is being conducted by a MBA student. The production line would be set up in unused space (Market Value Zero) in Sugar Landmain plant. Total cost of the machine is $300.000. The machinery has an economice of 4 years and will be depreciated using MACRS for 3 your property class. The machine will have a salvage value of $35.000 after 4 years The new line wil generate Sales of 1,500 units per year for 4 years and the best per unit is $100 in the first year Each unit can be sold for $200 is the first year. The sales price and variable cost espected to increase by 5% per year due to notion. Further, to handle the new line, the firm's not working capital would have to increase by $30.000 at time No change in NWC in years 1 through 3 and the NWC will be recuped in your 4) The firm's tax rate is 40% and its weighted average cost of captalis 11% NOTE: Please be sure to properly label your answers and where appropriate, please copy and paste the table into the answer submission box What are the depreciation expenses for years through ? (10 Posts) C o Don dute to is your contesto for years thought to point
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