Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. xyz inc. considers an investment project that requ

XYZ inc. considers an investment project that requires $200,000 in new equipment and $30,000 in...

60.1K

Verified Solution

Question

Finance

XYZ inc. considers an investment project that requires $200,000 in new equipment and $30,000 in extra NWC at the beginning of the project. The NWC will need to be increase by another $10,000 at the end of year t=1 and it will remain at the $40,000 level until the project is completed. The projects will lead to an increase in operating pre-tax net revenue of $75,000 per year and will last for 3 years. At the end of the project (beginning of year t=6), the equipment can be sold for the salvage value of $70,000. The equipment belongs to the CCA class with d=30%, the corporate income tax rate is 40%, and the cost of capital is 7%. Find the value discounted (If needed) to time t=3 of the cash flow from the sale of the equipment, including its tax effect

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: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

In your own words and (between 500-750 words) answer the following two questions in essay writing format: 1.How...

Psychology
Q

Describe D'Holbach's argument for why we do not have free will, even though it might appear...

Psychology
Q

Solve the following differential equations: 1.) y"(x)+ y(x)=4e^x ; y(0)=0, y'(0)=0 2.) x"(t)+3x'(t)+2x(t)=4t^2 ; x(0)=0, x'(0)=0

Advance Math
Q

Furthe Lise s1 4 ve abou cal 1 198 2 3 Denis of movements leage...

Biology
Q

In Young s double slit experiment if monochromatic light is replaced by white light 1...

Physics
Q

Equation of alternating current is given by 10 2 sin 100rt TU 6 root mean...

Physics
Q

Find the area of the shaded region The graph depicts the standard normal distribution of...

Statistics
Q

3 Question 8 Instructor created question suming that b is positive solve the following equation...

Calculus
Q

The graph given here shows the motion of a pedal on a child s bicycle...

Algebra
Q

Process E I-IV Aid issued...

Accounting
Q

This test is going to be easy, the student commented. All I need to know...

Accounting
Q

Suppose a stock has generated the following annual returns: 14.6%, -14.3% and 8.6%. What was...

Finance