4. Analysis of an expansion project Celestial Crane Cosmetics is considering an investment that will...
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4. Analysis of an expansion project Celestial Crane Cosmetics is considering an investment that will have the following sales, variable costs, and fixed operating costs: This project will require an investment of $25,000 in new equipment. The equipment will have no salvage value at the end of the project's four-year life. Celestial Crane Cosmetics pays a constant tax rate of 40%, and it has a required rate of return of 11%. When using accelerated depreciation, the project's net present value (NPV) is When using straight-line depreciation, the project's NPV is Using the depreciation method will result in the greater NPV for the project. No other firm would take on this project if Celestial Crane Cosmetics turns it down. How much should Celestial Crane Cosmetics reduce the NPV of this project if it discovered that this project would reduce one of its division's net after-tax cash flows by $300 for each year of the four-year project? $698$931$791$559 Celestial Crane Cosmetics spent $2,500.00 on a marketing study to estimate the number of units that it can sell each year. Crane Cosmetics do to take this information into account? Increase the amount of the initial investment by $2,500.00. Increase the NPV of the project $2,500.00. The company does not need to do anything with the cost of the marketing study because the marketing study is a sunk cost. 4. Analysis of an expansion project Celestial Crane Cosmetics is considering an investment that will have the following sales, variable costs, and fixed operating costs: This project will require an investment of $25,000 in new equipment. The equipment will have no salvage value at the end of the project's four-year life. Celestial Crane Cosmetics pays a constant tax rate of 40%, and it has a required rate of return of 11%. When using accelerated depreciation, the project's net present value (NPV) is When using straight-line depreciation, the project's NPV is Using the depreciation method will result in the greater NPV for the project. No other firm would take on this project if Celestial Crane Cosmetics turns it down. How much should Celestial Crane Cosmetics reduce the NPV of this project if it discovered that this project would reduce one of its division's net after-tax cash flows by $300 for each year of the four-year project? $698$931$791$559 Celestial Crane Cosmetics spent $2,500.00 on a marketing study to estimate the number of units that it can sell each year. Crane Cosmetics do to take this information into account? Increase the amount of the initial investment by $2,500.00. Increase the NPV of the project $2,500.00. The company does not need to do anything with the cost of the marketing study because the marketing study is a sunk cost
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4. Analysis of an expansion project Celestial Crane Cosmetics is considering an investment that will have the following sales, variable costs, and fixed operating costs: This project will require an investment of $25,000 in new equipment. The equipment will have no salvage value at the end of the project's four-year life. Celestial Crane Cosmetics pays a constant tax rate of 40%, and it has a required rate of return of 11%. When using accelerated depreciation, the project's net present value (NPV) is When using straight-line depreciation, the project's NPV is Using the depreciation method will result in the greater NPV for the project. No other firm would take on this project if Celestial Crane Cosmetics turns it down. How much should Celestial Crane Cosmetics reduce the NPV of this project if it discovered that this project would reduce one of its division's net after-tax cash flows by $300 for each year of the four-year project? $698$931$791$559 Celestial Crane Cosmetics spent $2,500.00 on a marketing study to estimate the number of units that it can sell each year. Crane Cosmetics do to take this information into account? Increase the amount of the initial investment by $2,500.00. Increase the NPV of the project $2,500.00. The company does not need to do anything with the cost of the marketing study because the marketing study is a sunk cost. 4. Analysis of an expansion project Celestial Crane Cosmetics is considering an investment that will have the following sales, variable costs, and fixed operating costs: This project will require an investment of $25,000 in new equipment. The equipment will have no salvage value at the end of the project's four-year life. Celestial Crane Cosmetics pays a constant tax rate of 40%, and it has a required rate of return of 11%. When using accelerated depreciation, the project's net present value (NPV) is When using straight-line depreciation, the project's NPV is Using the depreciation method will result in the greater NPV for the project. No other firm would take on this project if Celestial Crane Cosmetics turns it down. How much should Celestial Crane Cosmetics reduce the NPV of this project if it discovered that this project would reduce one of its division's net after-tax cash flows by $300 for each year of the four-year project? $698$931$791$559 Celestial Crane Cosmetics spent $2,500.00 on a marketing study to estimate the number of units that it can sell each year. Crane Cosmetics do to take this information into account? Increase the amount of the initial investment by $2,500.00. Increase the NPV of the project $2,500.00. The company does not need to do anything with the cost of the marketing study because the marketing study is a sunk cost 