Question
In: Finance
Thornley Machines is considering a 3-year project with an initial cost of $618,000. The project will...
Thornley Machines is considering a 3-year project with an
initial cost of $618,000. The project will not directly produce any
sales but will reduce operating costs by $265,000 a year. The
equipment is depreciated straight-line to a zero book value over
the life of the project. At the end of the project the equipment
will be sold for an estimated $60,000. The tax rate is 34%. The
project will require $23,000 in extra inventory for spare parts and
accessories.
Should this project be implemented if Thornley's requires a
9% rate of return? Why or why not?
Please show all work without excel
Solutions
Expert Solution
SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE
ANSWER : YES, PROJECT
SHOULD BE IMPLEMENTED AS NPV IS POSITIVE
jeff jeffy answered 2 years agoRelated Solutions
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