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X Corp plans to invest in new equipment costing 290,000 with no salvage value. The project will save 160,000 in cash operating cost for each of the next 3 years, at which time the machine can still be sold at 40,000 cash (even if the machine is fully depreciated). Tax rate is 40%. The minimum desired rate of return is 16%. Assuming that at the end of year 2, overhaul cost to be incurred by X is 5,000 (tax deductible). SLM is used for tax purposes. Pls use up to 4 decimal places for the PVF. What is the NPV?   • 5,114.20 • 8,589.60 • 9,231.40 • 17,573.20

X Corp plans to invest in new equipment costing 290,000 with no salvage value. The project will save 160,000 in cash operating cost for each of the next 3 years, at which time the machine can still be sold at 40,000 cash (even if the machine is fully depreciated). Tax rate is 40%. The minimum desired rate of return is 16%. Assuming that at the end of year 2, overhaul cost to be incurred by X is 5,000 (tax deductible). SLM is used for tax purposes. Pls use up to 4 decimal places for the PVF. What is the NPV?   • 5,114.20 • 8,589.60 • 9,231.40 • 17,573.20

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
10th Edition
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter12: Cash Flow Estimation And Risk Analysis
Section: Chapter Questions
Problem 10P: Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6...
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X Corp plans to invest in new equipment costing 290,000 with no salvage value. The project will save 160,000 in cash operating cost for each of the next 3 years, at which time the machine can still be sold at 40,000 cash (even if the machine is fully depreciated). Tax rate is 40%. The minimum desired rate of return is 16%. Assuming that at the end of year 2, overhaul cost to be incurred by X is 5,000 (tax deductible). SLM is used for tax purposes. Pls use up to 4 decimal places for the PVF. What is the NPV?

 

• 5,114.20
• 8,589.60
• 9,231.40
• 17,573.20
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