Question
In: Finance
Dickinson Brothers, Inc., is considering investing in a machine to produce computer keyboards. The price of...
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Dickinson Brothers, Inc., is considering investing in a machine to produce computer keyboards. The price of the machine will be $1,400,000, and its economic life is five years. The machine will be fully depreciated by the straight-line method. The machine will produce 27,000 keyboards each year. The price of each keyboard will be $49 in the first year and will increase by 6 percent per year. The production cost per keyboard will be $19 in the first year and will increase by 3 percent per year. The project will have an annual fixed cost of $255,000 and require an immediate investment of $220,000 in net working capital. The corporate tax rate for the company is 24 percent. The appropriate discount rate is 11 percent. |
| What is the NPV of the investment? |
Solutions
jeff jeffy answered 3 months agoRelated Solutions
Dickinson Brothers, Inc., is considering investing in a machine to produce computer keyboards. The price of...
Dickinson Brothers, Inc., is considering investing in a machine
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Dickinson Brothers, Inc., is considering investing in a machine to produce computer keyboards. The price of...
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Dickinson Brothers, Inc., is considering investing in a machine to produce computer keyboards. The price of...
Dickinson Brothers, Inc., is considering investing in a machine
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Dickinson Brothers, Inc., is considering investing in a machine to produce computer keyboards. The price of...
Dickinson Brothers, Inc., is considering investing in a machine
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$1,250,000, and its economic life is five years. The machine will
be fully depreciated by the straight-line method. The machine will
produce 24,000 keyboards each year. The price of each keyboard will
be $46 in the first year and will increase by 3 percent per year.
The production cost per keyboard will be $16 in the first year and
will...
Dickinson Brothers, Inc., is considering investing in a machine to produce computer keyboards. The price of...
Dickinson Brothers, Inc., is considering investing in a machine
to produce computer keyboards. The price of the machine will be
$978,000, and its economic life is five years. The machine will be
fully depreciated by the straight-line method. The machine will
produce 23,000 keyboards each year. The price of each keyboard will
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Dickinson Brothers, Inc., is considering investing in a machine to produce computer keyboards. The price of...
Dickinson Brothers, Inc., is considering investing in a machine
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$1,600,000, and its economic life is five years. The machine will
be fully depreciated by the straight-line method. The machine will
produce 25,000 keyboards each year. The price of each keyboard will
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Dickinson Brothers, Inc., is considering investing in a machine to produce computer keyboards. The price of...
Dickinson Brothers, Inc., is considering investing in a machine
to produce computer keyboards. The price of the machine will be
$1,700,000, and its economic life is five years. The machine will
be fully depreciated by the straight-line method. The machine will
produce 27,000 keyboards each year. The price of each keyboard will
be $59 in the first year and will increase by 4 percent per year.
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will...
Dickinson Brothers, Inc., is considering investing in a machine to produce computer keyboards. The price of...
Dickinson Brothers, Inc., is considering investing in a machine
to produce computer keyboards. The price of the machine will be
$1,700,000, and its economic life is five years. The machine will
be fully depreciated by the straight-line method. The machine will
produce 27,000 keyboards each year. The price of each keyboard will
be $59 in the first year and will increase by 4 percent per year.
The production cost per keyboard will be $26 in the first year and
will...
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