D Question 15 Ryan Company is considering whether to invest in a piece of equipment that requires an investment of $800,000 today. The project will provide net before-tax operating cash inflows of $240,00 of each year for eight years, and it will have a salvage value of $0 at the end of eight years. Ryan Company uses straight-line depreciation for income tax purposes. The income tax rate is 40% an rate is 13%. Income taxes are paid at the end of the year. Calculate the net present value of the piece of equipment. Don't forget income taxes!!! O negative $10,897 O positive $82,972 O positive $351,704 Onegative $25,882 O positive $178,948 O negative $128,172 O positive $159,754 O positive $252,780

EBK CFIN
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ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter10: Project Cash Flows And Risk
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Question 15
Ryan Company is considering whether to invest in a piece of equipment that requires an investment of $800,000 today. The project will provide net before-tax operating cash inflows of $240,00
of each year for eight years, and it will have a salvage value of $0 at the end of eight years. Ryan Company uses straight-line depreciation for income tax purposes. The income tax rate is 40% an
rate is 13%. Income taxes are paid at the end of the year. Calculate the net present value of the piece of equipment. Don't forget income taxes!!!
O negative $10,897
O positive $82,972
O positive $351,704
Onegative $25,882
O positive $178,948
O negative $128,172
O positive $159,754
O positive $252,780
Transcribed Image Text:D Question 15 Ryan Company is considering whether to invest in a piece of equipment that requires an investment of $800,000 today. The project will provide net before-tax operating cash inflows of $240,00 of each year for eight years, and it will have a salvage value of $0 at the end of eight years. Ryan Company uses straight-line depreciation for income tax purposes. The income tax rate is 40% an rate is 13%. Income taxes are paid at the end of the year. Calculate the net present value of the piece of equipment. Don't forget income taxes!!! O negative $10,897 O positive $82,972 O positive $351,704 Onegative $25,882 O positive $178,948 O negative $128,172 O positive $159,754 O positive $252,780
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