Quincy Quarry is considering buying new equipment. The equipment would cost $60,000, which would be depreciated...

Quincy Quarry is considering buying new equipment. The equipment would cost $60,000, which would be depreciated using MACRS 5-year method over the project’s life of 6 years, and would have a $5,000 salvage value. The anticipated income from the project is $29,000 on the first year. Afterwards, it grows at 3% per year. The cost of goods sold is $8,800, which grows at 5% per year afterwards. The fixed cost is $2,200. The project will require a net working capital of $8,000 each year, which is recoverable at the end of the project. The tax rate is 21 percent. If the cost of capital is 10%, should Quincy Quarry take this project? Why or why not? Remember to create a pro-forma financial statement in excel and paste it here.

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