You have been asked by the president of your company to evaluate proposed project involving a...

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You have been asked by the president of your company to evaluateproposed project involving a spectrometer. The equipment's baseprice is $140,000, and it would cost another $30,000 to modify itfor special use by your firm. The spectrometer, which falls intothe MACRS 3-year class, would be sold after 3 years for $60,000.The applicable depreciation rates are 33 percent, 45 percent, 15percent, and 7 percent. Use of the equipment would require anincrease in net operating working capital (spare parts inventory)of $8,000. The spectrometer would bring in $100,000 in revenue peryear for each of three years with $50,000 per year in operatingcosts per year. The firm's marginal federal-plus-state tax rate is25 percent. (3 year Project – Find cash flows for 3years)
If the project’s cost of capital is 12percent, find the all cash flows, NPV and MIRR for the project?

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You have been asked by the president of your company to evaluateproposed project involving a spectrometer. The equipment's baseprice is $140,000, and it would cost another $30,000 to modify itfor special use by your firm. The spectrometer, which falls intothe MACRS 3-year class, would be sold after 3 years for $60,000.The applicable depreciation rates are 33 percent, 45 percent, 15percent, and 7 percent. Use of the equipment would require anincrease in net operating working capital (spare parts inventory)of $8,000. The spectrometer would bring in $100,000 in revenue peryear for each of three years with $50,000 per year in operatingcosts per year. The firm's marginal federal-plus-state tax rate is25 percent. (3 year Project – Find cash flows for 3years)If the project’s cost of capital is 12percent, find the all cash flows, NPV and MIRR for the project?