Eggz, Incorporated, is considering the purchase of new equipment that will allow the company to collect loose hen feathers for sale. The equipment will cost $495,000 and will be eligible for 100 percent bonus depreciation. The equipment can be sold for $ 87,000 at the end of the project in 5 years. Sales would be $331,000 per year, with annual fixed costs of $61,000 and variable costs equal to 36 percent of sales. The project would require an investment of $53,000 in NWC that would be returned at the en of the project. The tax rate is 24 percent and the required return is 9 percent. Calculate the NPV of this project. (Do not round intermediate calculations and round your answer to 2 decimal places. e. a.. 32.16.)

Eggz, Incorporated, is considering the purchase of new equipment that will allow the company to collect loose hen feathers for sale. The equipment will cost $495,000 and will be eligible for 100 percent bonus depreciation. The equipment can be sold for $ 87,000 at the end of the project in 5 years. Sales would be $331,000 per year, with annual fixed costs of $61,000 and variable costs equal to 36 percent of sales. The project would require an investment of $53,000 in NWC that would be returned at the en of the project. The tax rate is 24 percent and the required return is 9 percent. Calculate the NPV of this project. (Do not round intermediate calculations and round your answer to 2 decimal places. e. a.. 32.16.)

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Description: I need solution please Eggz, Incorporated, is considering the purchase of new equipment that will allow the company to collect loose hen feathers forsale. The equipment will cost $495,000 and will be eligible for 100 percent bonus depreciation. The e

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 4P

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