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Your company purchased new equipment. The old equipment is at the end of its life. The...

Your company purchased new equipment. The old equipment is at the end of its life. The new equipment cost $140,000 and has a five-year useful life, with an estimated value of $57,000 after five years. It will be straight-line depreciated to zero. Sales will increase to $47,000 per year and costs will average 38% of sales. Inventory will increase by $4,000 due to increased sales. Your firm’s marginal tax rate is 28%. The discount rate is 9%. What is the NPV, IRR, and Payback Period, PV, PI for this investment? Do not use excel.

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jeff jeffy answered 2 years ago
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