an additional investment of 217000 This investment will be depreciated using

An additional investment of 217000 this investment

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an additional investment of $217,000. This investment will be depreciated using MACRS and a 3-year life. After 4 years, the equipment will have an economic and book value of zero. The firm’s tax rate is 30%. What is the net present value of the project? The discount rate is 10%. (Do not round intermediate calculations. Round your answer to the nearest dollar amount.)
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should be used for the actual calculations. All figures in thousands 0 1 2 3 4 Net worki ng capita l $ 351 $423 $ 144 $ 81 $ 0 Inve stmen t in NWC 351 72 −279 −63 −81 Inve stmen t in plant & equip ment 217 0 0 0 0 Cash flow from invest ment activit y $ −568 $−72 $ +279 $ +63 $ +81 All figures in thousands 0 1 2 3 4 Reven ue $ 1,170.0 0 $ 1,410.0 0 $ 480.00 $ 270.00 Cost 390.00 470.00 160.00 90.00 Depre ciation 72.30 96.50 32.10 16.08 Pretax profit 707.67 843.54 287.86 163.92 Taxes 212.30 253.06 86.36 49.18 Net income 495.37 590.48 201.50 114.74
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Depre ciation 72.33 96.46 32.14 16.08 Operat ing cash flow $567.70 $686.94 $ 233.64 $ 130.82 Total cash flow $−568 $495.70 $965.94 $ 296.64 $ 211.82 NPV = −$568 + $495.70 + $965.94 + $296.64 + $211.82 = $1,048.480, or $1,048,477 1.10 1.10 2 1.10 3 1.10 4Ilana Industries, Inc., needs a new lathe. It can buy a new high-speed lathe for $1.3 million. The lathe will cost $48,000 per year to run, but will save the firm $141,000 in labor costs, and will be useful for 10 years. Suppose that for tax purposes, the lathe will be depreciated on a straight-line basis over its 10-year life to a salvage value of $370,000. The actual market value of the lathe at that time also will be $370,000. The discount rate is 8%, and the corporate tax rate is 35%. What is the NPV of buying the new lathe? (Negative amount should be indicated by a minus sign. Enter your answer in dollars not in millions. Do not round intermediate calculations. Round your answer to 2 decimal places.)
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10]In a slow year, Deutsche Burgers will produce 2.9 million hamburgers at a total cost of $5.4 million. In a good year, it can produce 5.4 million hamburgers at a total cost of $6.1 million. What are the variable and fixed costs of hamburger production? (Enter your answers in dollars not in millions. Round "Variable cost" to 2 decimal places.)
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