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Oxygen Optimization is considering buying a new purification system. The new system would be purchased today...
Oxygen Optimization is considering buying a new purification system. The new system would be purchased today for 19,200 dollars. It would be depreciated straight-line to 1,400 dollars over 2 years. In 2 years, the system would be sold and the after-tax cash flow from capital spending in year 2 would be 2,000 dollars. The system is expected to reduce costs by 6,600 dollars in year 1 and by 14,700 dollars in year 2. If the tax rate is 50 percent and the cost of capital is 7.78 percent, what is the net present value of the new purification system project?
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jeff jeffy answered 2 years agoRelated Solutions
Oxygen Optimization is considering buying a new purification system. The new system would be purchased today...
Oxygen Optimization is considering buying a new purification
system. The new system would be purchased today for 18,400 dollars.
It would be depreciated straight-line to 1,000 dollars over 2
years. In 2 years, the system would be sold and the after-tax cash
flow from capital spending in year 2 would be 1,900 dollars. The
system is expected to reduce costs by 6,700 dollars in year 1 and
by 14,800 dollars in year 2. If the tax rate is 50 percent...
Oxygen Optimization is considering buying a new purification system. The new system would be purchased today...
Oxygen Optimization is considering buying a new purification
system. The new system would be purchased today for 16,200 dollars.
It would be depreciated straight-line to 2,000 dollars over 2
years. In 2 years, the system would be sold and the after-tax cash
flow from capital spending in year 2 would be 2,900 dollars. The
system is expected to reduce costs by 4,500 dollars in year 1 and
by 12,200 dollars in year 2. If the tax rate is 50 percent...
#30 Oxygen Optimization is considering buying a new purification system. The new system would be purchased...
#30 Oxygen Optimization is considering buying a new purification
system. The new system would be purchased today for 17,800 dollars.
It would be depreciated straight-line to 1,200 dollars over 2
years. In 2 years, the system would be sold and the after-tax cash
flow from capital spending in year 2 would be 1,900 dollars. The
system is expected to reduce costs by 6,800 dollars in year 1 and
by 14,200 dollars in year 2. If the tax rate is 50...
30. Oxygen Optimization is considering buying a new purification system. The new system would be purchased...
30. Oxygen Optimization is considering buying a new purification
system. The new system would be purchased today for 20,000 dollars.
It would be depreciated straight-line to 2,000 dollars over 2
years. In 2 years, the system would be sold and the after-tax cash
flow from capital spending in year 2 would be 2,700 dollars. The
system is expected to reduce costs by 6,300 dollars in year 1 and
by 13,900 dollars in year 2. If the tax rate is 50...
3 A. Oxygen Optimization is considering buying a new purification system. The new system would be...
3
A. Oxygen Optimization is considering buying a new purification
system. The new system would be purchased today for 16,000 dollars.
It would be depreciated straight-line to 1,200 dollars over 2
years. In 2 years, the system would be sold and the after-tax cash
flow from capital spending in year 2 would be 2,100 dollars. The
system is expected to reduce costs by 4,700 dollars in year 1 and
by 13,000 dollars in year 2. If the tax rate is...
Fairfax Pizza is considering buying a new oven. The new oven would be purchased today for...
Fairfax Pizza is considering buying a new oven. The new oven
would be purchased today for 17,600 dollars. It would be
depreciated straight-line to 1,200 dollars over 2 years. In 2
years, the oven would be sold for an after-tax cash flow of 1,700
dollars. Without the new oven, costs are expected to be 11,700
dollars in 1 year and 15,200 in 2 years. With the new oven, costs
are expected to be -500 dollars in 1 year and 9,300...
Fairfax Pizza is considering buying a new oven. The new oven would be purchased today for...
Fairfax Pizza is considering buying a new oven. The new oven
would be purchased today for 20,800 dollars. It would be
depreciated straight-line to 1,200 dollars over 2 years. In 2
years, the oven would be sold for an after-tax cash flow of 1,900
dollars. Without the new oven, costs are expected to be 10,400
dollars in 1 year and 17,400 in 2 years. With the new oven, costs
are expected to be -3,800 dollars in 1 year and 9,800...
Fairfax Pizza is considering buying a new oven. The new oven would be purchased today for...
Fairfax Pizza is considering buying a new oven. The new oven
would be purchased today for 14,000 dollars. It would be
depreciated straight-line to 1,400 dollars over 2 years. In 2
years, the oven would be sold for an after-tax cash flow of 2,600
dollars. Without the new oven, costs are expected to be 10,000
dollars in 1 year and 19,900 in 2 years. With the new oven, costs
are expected to be 1,500 dollars in 1 year and 17,100...
Fairfax Pizza is considering buying a new oven. The new oven would be purchased today for...
Fairfax Pizza is considering buying a new oven. The new oven
would be purchased today for 19,400 dollars. It would be
depreciated straight-line to 1,400 dollars over 2 years. In 2
years, the oven would be sold for an after-tax cash flow of 2,200
dollars. Without the new oven, costs are expected to be 12,200
dollars in 1 year and 18,500 in 2 years. With the new oven, costs
are expected to be -1,600 dollars in 1 year and 14,400...
Fairfax Pizza is considering buying a new oven. The new oven would be purchased today for...
Fairfax Pizza is considering buying a new oven. The new oven
would be purchased today for 17,400 dollars. It would be
depreciated straight-line to 2,200 dollars over 2 years. In 2
years, the oven would be sold for an after-tax cash flow of 2,800
dollars. Without the new oven, costs are expected to be 13,700
dollars in 1 year and 15,400 in 2 years. With the new oven, costs
are expected to be 3,900 dollars in 1 year and 12,300...
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