Question
In: Finance
Eggz, Inc., is considering the purchase of new equipment that will allow the company to collect...
Eggz, Inc., is considering the purchase of new equipment that will allow the company to collect loose hen feathers for sale. The equipment will cost $460,000 and will be eligible for 100 percent bonus depreciation. The equipment can be sold for $66,000 at the end of the project in 5 years. Sales would be $303,000 per year, with annual fixed costs of $54,000 and variable costs equal to 35 percent of sales. The project would require an investment of $39,000 in NWC that would be returned at the end of the project. The tax rate is 22 percent and the required return is 8 percent. Calculate the NPV of this project.
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jeff jeffy answered 11 months agoRelated Solutions
Eggz, Inc., is considering the purchase of new equipment that will allow the company to collect...
Eggz, Inc., is considering the purchase of new equipment that
will allow the company to collect loose hen feathers for sale. The
equipment will cost $425,000 and will be eligible for 100 percent
bonus depreciation. The equipment can be sold for $25,000 at the
end of the project in 5 years. Sales would be $275,000 per year,
with annual fixed costs of $47,000 and variable costs equal to 35
percent of sales. The project would require an investment of
$25,000...
Eggz, Inc., is considering the purchase of new equipment that will allow the company to collect...
Eggz, Inc., is considering the purchase of new equipment that
will allow the company to collect loose hen feathers for sale. The
equipment will cost $440,000 and will be eligible for 100 percent
bonus depreciation. The equipment can be sold for $54,000 at the
end of the project in 5 years. Sales would be $287,000 per year,
with annual fixed costs of $50,000 and variable costs equal to 37
percent of sales. The project would require an investment of
$31,000...
Eggz, Inc., is considering the purchase of new equipment that will allow the company to collect...
Eggz, Inc., is considering the purchase of new equipment that
will allow the company to collect loose hen feathers for sale. The
equipment will cost $490,000 and will be eligible for 100 percent
bonus depreciation. The equipment can be sold for $84,000 at the
end of the project in 5 years. Sales would be $327,000 per year,
with annual fixed costs of $60,000 and variable costs equal to 35
percent of sales. The project would require an investment of
$51,000...
Eggz, Inc., is considering the purchase of new equipment that will allow the company to collect...
Eggz, Inc., is considering the purchase of new equipment that
will allow the company to collect loose hen feathers for sale. The
equipment will cost $470,000 and will be eligible for 100 percent
bonus depreciation. The equipment can be sold for $72,000 at the
end of the project in 5 years. Sales would be $311,000 per year,
with annual fixed costs of $56,000 and variable costs equal to 37
percent of sales. The project would require an investment of
$43,000...
Eggz, Inc., is considering the purchase of new equipment that will allow the company to collect...
Eggz, Inc., is considering the purchase of new equipment that
will allow the company to collect loose hen feathers for sale. The
equipment will cost $475,000 and will be eligible for 100 percent
bonus depreciation. The equipment can be sold for $75,000 at the
end of the project in 5 years. Sales would be $315,000 per year,
with annual fixed costs of $57,000 and variable costs equal to 38
percent of sales. The project would require an investment of
$45,000...
Eggz, Inc., is considering the purchase of new equipment that will allow the company to collect...
Eggz, Inc., is considering the purchase of new equipment that
will allow the company to collect loose hen feathers for sale. The
equipment will cost $505,000 and will be eligible for 100 percent
bonus depreciation. The equipment can be sold for $93,000 at the
end of the project in 5 years. Sales would be $339,000 per year,
with annual fixed costs of $63,000 and variable costs equal to 38
percent of sales. The project would require an investment of
$57,000...
Eggs Inc. is considering the purchase of new equipment that will allow them to collect a...
Eggs Inc. is considering the purchase of new equipment that will
allow them to collect a loose head feathers for sale. the equipment
will cost $465,000 it will be eligible for 100% bonus depreciation
the equipment can be sold for $69,000 at the end of the project in
five years sales would be $307,000 per year with annual fix cost of
$55,000 and variable cost equals 36% of sales the project would
require an investment of $41,000 in NWC that...
B2B Co. is considering the purchase of equipment that would allow the company to add a...
B2B Co. is considering the purchase of equipment that would
allow the company to add a new product to its line. The equipment
is expected to cost $380,800 with a 10-year life and no salvage
value. It will be depreciated on a straight-line basis. The company
expects to sell 152,320 units of the equipment’s product each year.
The expected annual income related to this equipment
follows.
Sales
$
238,000
Costs
Materials, labor, and overhead (except depreciation on new
equipment)
83,000...
B2B Co. is considering the purchase of equipment that would allow the company to add a...
B2B Co. is considering the purchase of equipment that would
allow the company to add a new product to its line. The equipment
is expected to cost $379,200 with a 10-year life and no salvage
value. It will be depreciated on a straight-line basis. The company
expects to sell 151,680 units of the equipment’s product each year.
The expected annual income related to this equipment follows.
Sales
$
237,000
Costs
Materials,
labor, and overhead (except depreciation on new equipment)
83,000...
A company is considering purchasing new equipment. The purchase of the equipment is expected to...
A company is considering purchasing new equipment. The purchase
of the equipment is
expected to generate after tax
savings of $12,600 each year for 8 years. The company can
borrow money at 6%. Assume annual
compounding.
Determine the present value of
the future cash inflows.
Hint: the $12,600 are your annuity payments
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