The president of Real Time Inc has asked you to evaluate the proposed acquisition of a...
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The president of Real Time Inc has asked you to evaluate the proposed acquisition of a new computer The computer's price is $38,000, and it falls into the MACRS 3-year class. Purchase of the computer would require an increase in net working capital of $2.000 The computer would increase the firm's before-tax revenues by $20,000 per year but would also increase operating costs by S5.000 per year The computer is expected to be used for 5 years and then be sold for $14,000 The firm's marginal tax rate is 40 percent, and the project's cost of capital is 14 percent Question 13 (1 point) v Saved What is the net investment required at t= 0? A) -$42,000 B) -$40,000 OC) -$38,600 D) -$37,600 O E) -36 600 The president of Real Time Inc has asked you to evaluate the proposed acquisition of a new computer The computer's price is $38,000, and it falls into the MACRS 3-year class. Purchase of the computer would require an increase in net working capital of $2.000 The computer would increase the firm's before-tax revenues by $20,000 per year but would also increase operating costs by S5.000 per year The computer is expected to be used for 5 years and then be sold for $14,000 The firm's marginal tax rate is 40 percent, and the project's cost of capital is 14 percent Question 13 (1 point) v Saved What is the net investment required at t= 0? A) -$42,000 B) -$40,000 OC) -$38,600 D) -$37,600 O E) -36 600
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Question 13 Net Investment required at t 0 will be equ... View the full answer
Related Book For
Statistics for Business and Economics
ISBN: 978-0132930192
8th edition
Authors: Paul Newbold, William Carlson, Betty Thorne
Posted Date:
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