Calculate the net investment required to acquire the new saw. b. The new saw is expected to reduce operating costs (exclusive of depreciation) for SDE by $800,000 per year over the asset’s expected 10-‐year life. Also, the increased productivity of the new saw is expected to increase SDE’s revenue by $2 million per year. Salvage value at the end of 10 years is expectedto be $0. Calculate the annual net cash flows for this investment. c. Compute the NPV for this project.
Seco Dame Enterprises (SDE) acquired a robotic saw six years ago at a cost of $10 million. The saw was
a.Calculate the net investment required to acquire the new saw. b. The new saw is expected to reduce operating costs (exclusive of depreciation) for SDE by $800,000 per year over the asset’s expected 10-‐year life. Also, the increased productivity of the new saw is expected to increase SDE’s revenue by $2 million per year. Salvage value at the end of 10 years is expectedto be $0. Calculate the annual net cash flows for this investment. c. Compute the
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