Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. b de f g h m n 1 abc company is thinking of openi

B DE F G H M N 1 ABC company is thinking of opening...

70.2K

Verified Solution

Question

Finance

image

B DE F G H M N 1 ABC company is thinking of opening a new warehouse, and the key data are shown below. 2 The company owns the building that would be used, and it could sell it for $100,000 after taxes if it decides not to open the new warehouse 3 The equipment for the project would be depreciated by the straight-line method over the project's 3-year life, after which it would be worth nothing and thus it would have a zero salvage value 4 No new working capital would be required, and revenues and other operating costs would be constant over the project's 3-year life. What is the project's NPV? 5 6 WACC 10% 7 Opportunity cost $100,000 8 Net equipment cost (depreciable basis) $65.000 9 Straight-line deprec. rate for equipment 33.33% 10 Sales revenues, each year $123,000 11 Operating costs (excl. deprec.), each year $25,000 12 Tax rate 35% 13 14 15

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students