A fast-food company invests $2.4 million to buy machines for making slurpies. These can be depreciated using the MACRS schedule shown above. If the cost of capital is 10%, what is the increase in the net present value (NPV) of the product gained by using MACRS depreciation over straight-line depreciation for three years? A) $34,452 B) $66,782 C) $78,084 D) 207702
A fast-food company invests $2.4 million to buy machines for making slurpies. These can be depreciated using the MACRS schedule shown above. If the cost of capital is 10%, what is the increase in the net present value (NPV) of the product gained by using MACRS depreciation over straight-line depreciation for three years? A) $34,452 B) $66,782 C) $78,084 D) 207702
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 13P
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![A fast-food company invests $2.4 million to buy machines for making slurpies. These can be
depreciated using the MACRS schedule shown above. If the cost of capital is 10%, what is the
increase in the net present value (NPV) of the product gained by using MACRS depreciation over
straight-line depreciation for three years? A) $34,452 B) $66,782 C) $78,084 D) 207702](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff0f48d8b-6938-4f9c-bbbb-55b2b4ac6c77%2F0cedb8f9-5dfa-4c83-961d-0646fb196300%2F6dlyzj_processed.png&w=3840&q=75)
Transcribed Image Text:A fast-food company invests $2.4 million to buy machines for making slurpies. These can be
depreciated using the MACRS schedule shown above. If the cost of capital is 10%, what is the
increase in the net present value (NPV) of the product gained by using MACRS depreciation over
straight-line depreciation for three years? A) $34,452 B) $66,782 C) $78,084 D) 207702
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