Eggz, Incorporated, is considering the purchase of new equipment that will allow company to collect loose hen feathers for sale. The equipment will cost $525,000 will be eligible for 100 percent bonus depreciation. The equipment can be sold $35,000 at the end of the project in five years. Sales would be $348,000 per year, annual fixed costs of $56,000 and variable costs equal to 35 percent of sales. project would require an investment of $40,000 in NWC that would be returned at end of the project. The tax rate is 22 percent and the required return is 9 perc Calculate the NPV of this project. (Do not round intermediate calculations and ro your answer to 2 decimal places, e.g., 32.16.) NPV

Eggz, Incorporated, is considering the purchase of new equipment that will allow company to collect loose hen feathers for sale. The equipment will cost $525,000 will be eligible for 100 percent bonus depreciation. The equipment can be sold $35,000 at the end of the project in five years. Sales would be $348,000 per year, annual fixed costs of $56,000 and variable costs equal to 35 percent of sales. project would require an investment of $40,000 in NWC that would be returned at end of the project. The tax rate is 22 percent and the required return is 9 perc Calculate the NPV of this project. (Do not round intermediate calculations and ro your answer to 2 decimal places, e.g., 32.16.) NPV

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EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 4P

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