The local franchise of Jiffy Lube is thinking of buying a new lift for $60,000 that would

Fantastic news! We've Found the answer you've been seeking!

Question:

The local franchise of Jiffy Lube is thinking of buying a new lift for $60,000 that would make it easier to access the oil filter in customers' cars and save labor. The savings would increase over the project's 3-year life, in line with the projected growth of the business. The machine is to be linearly depreciated to zero and will have no resale value after 3 years.

The appropriate cost of capital for this project is 13%. The company has a tax rate of 21%.

a. What is the project cash flow in year 1?

b. What is the project cash flow in year 2?

c. What is the project cash flow in year 3?

d. What is the NPV of this project?

	Year 1	Year 2	Year 3
Cost savings	60,000	66,000	79,200
Depreciation	20,000	20,000	20,000
EBIT	40,000	46,000	59,200
Taxes (21%)
NOPAT
Depreciation
PCF

Posted Date: May 18, 2024 11:16 AM

See More Questions

Write a method remove() that takes a linked-list Node and a string key as its arguments and removes every node in the list whose item field is equal to key.
Leapin Larrys Pre-Owned Cars has two divisions, Operations and Financing. Operations is responsible for selling Larrys inventory as quickly as possible and purchasing cars for future sale. Financing...
Suppose that Y is a normal variable, where (a) Does the random variable W = 3Y have a normal distribution? (b) Does the random variable W = 3Y + 1 have a normal distribution? (1/-/2 ) exp
Which of the following flowcharts illustrates the flow of information among areas of responsibility in an organization? a. program flowchart c. system flowchart b. computer configuration chart d....
Figure shows a partially completed MPS record for ball bearings. a. Develop the MPS for ball bearings. b. Four customer orders arrived in the following sequence: Assume that you must commit to the...
Select two fast-food restaurants and evaluate them in terms of service quality. Suggest ways to improve the service quality. Evaluate the two fast-food restaurants in terms of the "Seven QC tools"...
evaluate the principles of management advanced by Henry fayol and show their implications for effective management of a development project you are familiar with.? Explain it and need typed answers...
Prepare strategies/tactics Template to build a strong brand and differentiate it from competitors Prepare a presentation on "Brand differentiating strategies" for a service oriented organization,...
Green Productions performs London shows. The average show sells 1,095 tickets at $45 per ticket. There are 180 shows per year. No additional shows can be held as the theater is also used by other...
The stockholders' equity of the Broadway Corp. on January 1, 2020 is given below: 8% Preferred Stock, P75 par value, authorized and issued 40,000 shares P Common stocks, P100 par value, authorized...
Swag co Inc., a British company, is a wholly owned subsidiary of Give Away Inc., a Canadian company that reports under IFRS, with the Canadian dollar as its functional currency. The following are the...
Ace Dairies gives a home delivery service for milk, dairy products and a range of related goods. Roger Smitheram has run the dairy for the past twelve years. His product is a combination of goods...
Your firm has two divisions (A) and (B). Both divisions do not have any leverage and will not take on leverage in the future. Division (A) is expected to generate unlevered free cash flows (FCFs) of...
San Carlos Bank and Trust Company uses a credit-scoring system to evaluate most consumer loans that amount to more than $2,500. The key factors used in its scoring system are found at the conclusion...
Figure 1-2 shows that organizational culture and the design of an AIS influence one another. What does this imply about the degree to which an innovative system I developed by one company can be...
One interesting property of digital assets is that they can be reproduced and dis tributed via the Internet at very little cost. What are some of the implications of having a product with a marginal...
Figure 1-2 shows that developments in IT affect both an organizations strategy and the design of its AIS. How can a company determine whether it is spending too much, too little, or just enough on...

The local franchise of Jiffy Lube is thinking of buying a new lift for $60,000 that would

Question:

Expert Answer:

Students also viewed these finance questions