Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. d: should the machine be purchased? (yes/no) th

d: should the machine be purchased? (YES/NO) The Campbell Company is considering...

60.1K

Verified Solution

Question

Finance

image
d: should the machine be purchased? (YES/NO)
The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $870,000, and it would cost another 517,500 to install it. The machine falls anto the MACRS 5-year class (the applicable MACRS depreciation rates are 33.33%, 44.45, 14.81%, and 7.4146), and it would be sold after 3 years for $624,000. The machine would require an increase in networking capital (inventory) of 318,500. The sprayer would not change revenues, but it is expected to save the firm 5451,000 per year in before tax operating costs, mainly labor Campbell's marginal tax rate is 35%. Cash outflows, if any, should be indicated by a minus sion. Do not round intermediate calculation. Round your answers to the nearest dollar What is the Year-Onet cash flow? 5 5. What are the net operating cash flows in Years 1, 2, and ** Year 15 Year 25 Year 3:5 What is the additional Your 3 can now (le, the after-tax calvage and the return of working capital) 5 d. If the project's cost of capital is 12, what is the NPV of the project? 5 Should the machine be purchased? -Select

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