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Walla Walla Fishing Company is contemplatinf the purchase of a new smoker. the smoker will cost $57,600 but will generate additional revenue of $34,400 per year for 6 years. Additional costs, other than depreciation, will equal $11,900 per year. The smoker has an expected life of 6 years, at which time it will have no residual value. Walla Walla uses the straight-line method if depreciation for tax purposes. Determine the net present value of the investment if the required rate of return is 14% and the tax rate is 40%.

Net present value = ?

Should Walla Walla make the investment in the smoker = ?

ed Hwic Emma MWleyPLUS iambalvo, Hanagerial Accounting, Ge Hele I Question a Walla Wala Fishing Cempany is contemplating the purchase ofmew mker. The smoker well cot $57,600 but weil generate additional re of $34 400 per year for 6 years. Additional costs, other than depreciation, will Dear na . . r . v-ke of a estm-t I t-s-red is i. Pereer, and the ta, .at.. 40 percent. (Round present value facto, cal alation, to 4 deramal places, 4 wi. o etur ili si and f al answer to O decimal places, e.p Net present value Should waa Wale Wale 12s. rnter negative amounts uang either a negative "sun preceding ah, numbe, " as e, parentheses e-ras).) Walla make the nvestment in the smaker

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