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 cash flow at t=1

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

Other questions asked by students

Q

Explain how a business in Oman can benefit from ‘profit’. The answer should include: i. A brief...

Civil Engineering
Q

What is the ITCZ and what is its influence in tropical rainfall?

Biology
Q

Why most sets of Christmas (holiday) lights say not to connect more than 3 strands together?...

Electrical Engineering
Q

38 The total radiative power emitted by spherical blackbody with radius R and temperature T...

Physics
Q

Eleven resistors connected in network as shown in figure The equivalent resistance between A and...

Physics
Q

9 01 Last week This week Seved Mikey is paid 16 40 per hour Last...

Calculus
Q

gives us Step 3 15 sin x 1 sin x cos x dx 15 sin...

Calculus
Q

1 point Evaluate the integral 0 3 8x 1 dx

Calculus
Q

42) The following unadjusted and adjusted trial balances are from the current year's accounting system...

Accounting
Q

Solve it

Accounting
Q

A manufacturer uses standard costing. For the month, the labor price variance was unfavorable while...

Accounting
Q

Decentralization refers to companies that have multiple locations. True False

Accounting