Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. intro you're evaluating a new electron microscope

Intro You're evaluating a new electron microscope for the QA (quality assurance) unit. The microscope will...

80.2K

Verified Solution

Question

Finance

Intro You're evaluating a new electron microscope for the QA(quality assurance) unit. The microscope will cost $24,000 to buyand another $2,000 to install, and will be sold for $1,800 after 3years. It falls into the 3-year MACRS class, with depreciationrates as follows: Year 1 2 3 4 Depreciation rate 33% 45% 15% 7% Themicroscope will require an inventory of spare parts worth $5,000.The equipment will not increase revenue, but will save the company$12,000 in labor costs each year. Your company's marginal tax rate(federal plus state) is 34% and the appropriate cost of capital forthis project is 13%

Attempt 1/5 for 10 pts. Part 1 What is the initial (year-0) freecash flow from the project? Choose the right sign.

Attempt 1/5 for 10 pts. Part 2 What is the free cash flow inyear 1?

Attempt 1/5 for 10 pts. Part 3 What is the free cash flow inyear 2?

Attempt 1/5 for 10 pts.Part 4 What is the after-tax salvagevalue at the end of year 3?

Attempt 1/5 for 10 pts. Part 5 What is the free cash flow inyear 3?

Attempt 1/5 for 10 pts. Part 6 What is the NPV of thisproject?

Answer & Explanation Solved by verified expert
4.2 Ratings (567 Votes)
Initial Investment Base Price Installation Cost Initial Investment 24000 2000 Initial Investment 26000 Useful Life 3 years Depreciation Year 1 33 26000 Depreciation Year 1 8580 Depreciation Year 2 45 26000 Depreciation Year 2 11700 Depreciation Year 3 15 26000 Depreciation Year 3 3900 Answer 1    See Answer
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: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

According to the Fundamental Theorem of Algebra how many roots exist for the polynomial function...

Algebra
Q

Patient scenario Mr. Singh is a 38-year old who practices power lifting 4 times per week. Usually...

Medical Sciences
Q

What is Jesus' (main theme of ) ethical ground? In what way MLK practiced Jesus' ethic?...

Psychology
Q

Billiard ball A of mass mA = 0.116 kg moving with speed vA = 2.80 m/s...

Physics
Q

What is considered high and low power factor? Can you give four examples of appliances that...

Electrical Engineering
Q

Question 5 Answer arcs SC BIOLT001 P Biology II Evo When dating fossils the half...

Biology
Q

Put the following steps stages of inflammation in the correct order phagocyte migration margination diapedesis...

Biology
Q

A diode is a device that allows current to be carried in only one direction...

Physics
Q

dy dx y ln x 8x y 8 dy dx Find where

Calculus
Q

Checking your own credit Pre approvals from credit card companies Applying for a new credit...

Algebra
Q

Wanda and Howard Background Wanda and Howard have been married for 50 years and are...

Accounting
Q

Help Save & EX Submit Check my work Troy Engines, Limited, manufactures a variety of...

Accounting