9 MC algo 10-30 Cash Flows And NPV Cori's Dog House is considering the installation of a new computerized pressure cooker for hot dogs. The cooker will increase sales by $8,700 per year and will cut annual operating costs by $12,900. The system will cost $45,000 to purchase and install. This system is expected to have a 4-year life and will be depreciated to zero using straight-line depreciation and have no salvage value. The tax rate is 21 percent and the required return is 10.4 percent. What is the NPV of purchasing the pressure cooker? Multiple Choice $1,738 $16,050 −$24,047 −$8,868 Incorrect $22,103
9 MC algo 10-30 Cash Flows And NPV Cori's Dog House is considering the installation of a new computerized pressure cooker for hot dogs. The cooker will increase sales by $8,700 per year and will cut annual operating costs by $12,900. The system will cost $45,000 to purchase and install. This system is expected to have a 4-year life and will be depreciated to zero using straight-line depreciation and have no salvage value. The tax rate is 21 percent and the required return is 10.4 percent. What is the NPV of purchasing the pressure cooker? Multiple Choice $1,738 $16,050 −$24,047 −$8,868 Incorrect $22,103
Chapter10: Project Cash Flows And Risk
Section: Chapter Questions
Problem 7PROB
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9
MC algo 10-30 Cash Flows And NPV
Cori's Dog House is considering the installation of a new computerized pressure cooker for hot dogs. The cooker will increase sales by $8,700 per year and will cut annual operating costs by $12,900. The system will cost $45,000 to purchase and install. This system is expected to have a 4-year life and will be depreciated to zero using straight-line depreciation and have no salvage value. The tax rate is 21 percent and the required return is 10.4 percent. What is the NPV of purchasing the pressure cooker?
Multiple Choice
-
$1,738
-
$16,050
-
−$24,047
-
−$8,868
Incorrect -
$22,103
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