USE THE FOLLOWING DATA TO COMPLETE THE QUIZ: B ase price is $80,000 $11,000 to modify MACRS
Question:
USE THE FOLLOWING DATA TO COMPLETE THE QUIZ:
Base price is $80,000
$11,000 to modify
MACRS 3-year class property
Sold after THREE (3) years for $5,800
Additional Net Working Capital (NWC) required in the amount of $4,200
SAVINGS of $36,000 per year
Tax rate is 40 percent
Cost of capital is 6 percent.
MACRS Recovery Allowance Percentages
Year
Ownership 3-Year 5-Year 7-Year
1 33 20 14
2 45 32 25
3 15 19 17
4 7 12 13
5 11 9
6 6 9
7 9
8 4
1. Find DPB
2. Find NPV
3. Find MIRR
4. Find PI
5. Will the company accept the project? Why or Why not.
Macroeconomics Principles And Policy
ISBN: 9780324586213
11th Edition
Authors: William J. Baumol, Alan S. Blinder