Café Sovrano studies an expansion of Virgin. summary • The company will have to purchase equipment valued at $1,500,000, cost of assembly and installation equaling $100,000. • The project should have an economic life of 5 years. • Can be used as a trade method. • At the start of the project, the company's information, account on account receivable, $80,000 and inventory is sent. It is expected to have an average value of 5 years. • The company expects to achieve sales of 725 thousand dollars during the first two years and 650 thousand dollars in sales during a long period • It is expected to be attached to the project. • The corporate tax rate is 30% • 20% cost of capital What do you recommend?
Café Sovrano studies an expansion of Virgin. summary • The company will have to purchase equipment valued at $1,500,000, cost of assembly and installation equaling $100,000. • The project should have an economic life of 5 years. • Can be used as a trade method. • At the start of the project, the company's information, account on account receivable, $80,000 and inventory is sent. It is expected to have an average value of 5 years. • The company expects to achieve sales of 725 thousand dollars during the first two years and 650 thousand dollars in sales during a long period • It is expected to be attached to the project. • The corporate tax rate is 30% • 20% cost of capital What do you recommend?
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
Problem 1PS
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15).
Transcribed Image Text:Café Sovrano studies an expansion of Virgin. summary
• The company will have to purchase equipment valued at $1,500,000, cost of assembly and installation equaling
$100,000.
• The project should have an economic life of 5 years.
• Can be used as a trade method.
• At the start of the project, the company's information, account on account receivable, $80,000 and inventory is sent.
• It is expected to have an average value of 5 years.
• The company expects to achieve sales of 725 thousand dollars during the first two years and 650 thousand dollars in
sales during a long period
• It is expected to be attached to the project.
• The corporate tax rate is 30%
• 20% cost of capital
What do you recommend?
please use your keyboard
not less than 400words
thank you
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