I have 15 minutes to answer question. 1-Your company, Dominant Retailer, Inc., is considering a project whose...

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Finance

I have 15 minutes to answer question.
1-Your company, Dominant Retailer, Inc., is considering aproject whose data are shown below. Revenue and cash operatingexpenses are expected to be constant over the project's 5 yearexpected operating life; annual sales revenue is $95,000.00 andcash operating expenses are $37,500.00. The new equipment's costand depreciable basis is $135,000.00 and it will be depreciated byMACRS as 5 year property. The new equipment replaces olderequipment that is fully depreciated but can be sold for $7,500. Inaddition, the new equipment requires an additional $5,000 of netoperating working capital, which can be fully recovered at the endof the project. The new equipment is expected to be sold for$10,995 at the end of the project in year 5. The marginal tax rateis 28.00%. What is the project's Initial Cash Outlay at Year 0?Note: Enter your answer rounded off to two decimal points. Do notenter $ or comma in the answer box. For example, if your answer is$12,300.456 then enter as 12300.46 in the answer box.
2-Using the information from problem 2 on Dominant Retailer,Inc., what is the Year 4 Net Operating Cash Flow? Enter your answerrounded to two decimal places. Do not enter $ or comma in theanswer box. For example, if your answer is $12,300.456 then enteras 12300.46 in the answer box.
3-Using the information from problem 2 on Dominant Retailer,Inc., what is the Terminal Year Non–Operating Cash Flow at the endof Year 5? Enter your answer rounded to two decimal places. Do notenter $ or comma in the answer box. For example, if your answer is$12,300.456 then enter as 12300.46 in the answer box.
4-Using the information from problem 2 on Dominant Retailer,Inc., what is the NPV of the Project if Dominant Retailer’s WACC is13.75%? Enter your answer rounded to two decimal places. Do notenter $ or comma in the answer box. For example, if your answer is$12,300.456 then enter as 12300.46 in the answer box.

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4.1 Ratings (570 Votes)

1 Initial Project Outlay Investment in New Equipment Salvage Value of Old Equipment 1 Tax Working CapitalInitial Project Outlay 135000 7500 1 028 See Answer

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I have 15 minutes to answer question.1-Your company, Dominant Retailer, Inc., is considering aproject whose data are shown below. Revenue and cash operatingexpenses are expected to be constant over the project's 5 yearexpected operating life; annual sales revenue is $95,000.00 andcash operating expenses are $37,500.00. The new equipment's costand depreciable basis is $135,000.00 and it will be depreciated byMACRS as 5 year property. The new equipment replaces olderequipment that is fully depreciated but can be sold for $7,500. Inaddition, the new equipment requires an additional $5,000 of netoperating working capital, which can be fully recovered at the endof the project. The new equipment is expected to be sold for$10,995 at the end of the project in year 5. The marginal tax rateis 28.00%. What is the project's Initial Cash Outlay at Year 0?Note: Enter your answer rounded off to two decimal points. Do notenter $ or comma in the answer box. For example, if your answer is$12,300.456 then enter as 12300.46 in the answer box.2-Using the information from problem 2 on Dominant Retailer,Inc., what is the Year 4 Net Operating Cash Flow? Enter your answerrounded to two decimal places. Do not enter $ or comma in theanswer box. For example, if your answer is $12,300.456 then enteras 12300.46 in the answer box.3-Using the information from problem 2 on Dominant Retailer,Inc., what is the Terminal Year Non–Operating Cash Flow at the endof Year 5? Enter your answer rounded to two decimal places. Do notenter $ or comma in the answer box. For example, if your answer is$12,300.456 then enter as 12300.46 in the answer box.4-Using the information from problem 2 on Dominant Retailer,Inc., what is the NPV of the Project if Dominant Retailer’s WACC is13.75%? Enter your answer rounded to two decimal places. Do notenter $ or comma in the answer box. For example, if your answer is$12,300.456 then enter as 12300.46 in the answer box.