Question 1:

Accounting Question

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Question 4:

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.33 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 $1,663,000 in annual sales, with costs of $637,000. 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 Letang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System A costs $270,000, has a four-year life, and requires $77,000 in pretax annual operating costs. System B costs $350,000, has a six-year life and requires $71,000 in pretax annual operating costs. Both systems are to be depreciated straight-line to zero over their lives and will have zero salvage value. Whichever project is chosen, it will not be replaced when it wears out. The tax rate is 21 percent and the discount rate is 8 percent. Calculate the NPV for both conveyor belt systems. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. 424,527,425.00 3 552,667,059.00 System A System B Which conveyor belt system should the firm choose? System B System Ao