Harper Electronics is considering investing in manufacturing equipment expected to cost $250,000. The equipment has...
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Harper Electronics is considering investing in manufacturing equipment expected to cost $ The equipment has an estimated useful life of four years and a salvage value of $ It is expected to produce incremental cash revenues of $ per year. Harper has an effective income tax rate of percent and a desired rate of return of percent. PV of $ and PVA of $ Note: Use appropriate factors from the tables provided. Required Determine the net present value and the present value index of the investment, assuming that Harper uses straightline depreciation for financial and income tax reporting. Determine the net present value and the present value index of the investment, assuming that Harper uses doubledecliningbalance depreciation for financial and income tax reporting. Determine the payback period and unadjusted rate of return use average investment assuming that Harper uses straightline depreciation. Determine the payback period and unadjusted rate of return use average investment assuming that Harper uses doubledecliningbalance depreciation. Note: Use average annual cash flow when computing the payback period and average annual income when determining the unadjusted rate of return.
Harper Electronics is considering investing in manufacturing equipment expected to cost $ The equipment has an estimated useful life of four years and a salvage value of $ It is expected to produce incremental cash revenues of $ per year. Harper has an effective income tax rate of percent and a desired rate of return of percent. PV of $ and PVA of $
Note: Use appropriate factors from the tables provided.
Required
Determine the net present value and the present value index of the investment, assuming that Harper uses straightline depreciation for financial and income tax reporting.
Determine the net present value and the present value index of the investment, assuming that Harper uses doubledecliningbalance depreciation for financial and income tax reporting.
Determine the payback period and unadjusted rate of return use average investment assuming that Harper uses straightline depreciation.
Determine the payback period and unadjusted rate of return use average investment assuming that Harper uses doubledecliningbalance depreciation. Note: Use average annual cash flow when computing the payback period and average annual income when determining the unadjusted rate of return.
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