Question: Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.28 million. The fixed asset will be depreciated

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.28 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1.648,000 in annual sales, with costs of $627.000. If the tax rate is 22 percent, what is the OCF for this project? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) OCF Vandelay Industries is considering the purchase of a new machine for the production of latex Machine A costs $3,320,000 and will last for six years. Variable costs are 38 percent of sales, and fixed costs are $460,000 per year. Machine B costs $5,598,000 and will last for nine years. Variable costs for this machine are 33 percent of sales and fixed costs are $295,000 per year. The sales for each machine will be $13.5 million per year. The required return is 8 percent, and the tax rate is 25 percent. Both machines will be depreciated on a straight-line basis. The company plans to replace the machine when it wears out on a perpetual basis. Calculate the EAC for each machine. (A negative answer should be indicated by a minus sign. Do not round Intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1.234,567.89.) System A System B to earth
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