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A widget machine will cost $250,000. The anticipated increase in revenue will be $119,000/year for 5 - years. Annual expenses will be $20,000/year for 5-years. The depreciable life is estimated to be 5-years and the salvage value will equal $40,000. Additional inventory necessary to run the machine will be $ 10,000. Initial training expenses are $20,000. Tax rate equals 40 %. Find the NPV @ 10%. Find the IRR. Find the discounted payback and convert this into a percentage.

A widget machine will cost $250,000. The anticipated increase in revenue will be $119,000/year for 5 - years. Annual expenses will be $20,000/year for 5-years. The depreciable life is estimated to be 5-years and the salvage value will equal $40,000. Additional inventory necessary to run the machine will be $ 10,000. Initial training expenses are $20,000. Tax rate equals 40 %. Find the NPV @ 10%. Find the IRR. Find the discounted payback and convert this into a percentage.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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A widget machine will cost $250,000. The anticipated increase in revenue will be $119,000/year for 5 - years. Annual expenses will be $20,000/year for 5-years. The depreciable life is estimated to be 5-years and the salvage value will equal $40,000. Additional inventory necessary to run the machine will be $ 10,000. Initial training expenses are $20,000. Tax rate equals 40 %. Find the NPV @ 10%. Find the IRR. Find the discounted payback and convert this into a percentage.
Transcribed Image Text:A widget machine will cost $250,000. The anticipated increase in revenue will be $119,000/year for 5 - years. Annual expenses will be $20,000/year for 5-years. The depreciable life is estimated to be 5-years and the salvage value will equal $40,000. Additional inventory necessary to run the machine will be $ 10,000. Initial training expenses are $20,000. Tax rate equals 40 %. Find the NPV @ 10%. Find the IRR. Find the discounted payback and convert this into a percentage.
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