FITCO is considering the purchase of new equipment. The equipment costs $328000, and an additional $109000 is needed to install it. The equipment will be depreciated straight-line to zero over a 5-year life. The equipment will generate additional annual revenues of $260000, and it will have annual cash operating expenses of $83000. The equipment will be sold for $82000 after 5 years. An inventory investment of $74000 is required during the life of the investment. FITCO is in the 40 percent tax bracket, and its cost of capital is 9 percent. What is the project NPV? O $118134. $83826. $100605 $67757

FITCO is considering the purchase of new equipment. The equipment costs $328000, and an additional $109000 is needed to install it. The equipment will be depreciated straight-line to zero over a 5-year life. The equipment will generate additional annual revenues of $260000, and it will have annual cash operating expenses of $83000. The equipment will be sold for $82000 after 5 years. An inventory investment of $74000 is required during the life of the investment. FITCO is in the 40 percent tax bracket, and its cost of capital is 9 percent. What is the project NPV? O $118134. $83826. $100605 $67757

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 10P

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