Use the information for the question(s) below. Epiphany Industries is considering a new capital budgeting...
90.2K
Verified Solution
Link Copied!
Question
Finance
Use the information for the question(s) below.
Epiphany Industries is considering a new capital budgeting project that will last for three years. Epiphany plans on using a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incremental cash flow projects:
| Year | 0 | 1 | 2 | 3 |
|---|---|---|---|---|
| Sales (Revenues) | 100,000 | 100,000 | 100,000 | |
| Cost of Goods Sold (50% of Sales) | 50,000 | 50,000 | 50,000 | |
| Capital Cost Allowance | 13,500 | 22,950 | 16,065 | |
| =EBIT | 36,500 | 27,050 | 33,935 | |
| Taxes (35%) | 12,775 | 9,468 | 11,877 | |
| =Unlevered net income | 23,725 | 17,582 | 22,058 | |
| +Capital Cost Allowance | 13,500 | 22,950 | 16,065 | |
| +Changes to working capital | 5,000 | 5,000 | 10,000 | |
| Capital Expenditures | 90,000 |
The net present value (NPV) for Epiphany's Project is closest to:
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!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.