Intro The local franchise of Jiffy Lube is thinking of buying a new lift for $80,000 that would make it easier to access the oil filter in customers' cars and save labor. The savings would increase over the project's 3-year life, in line with the projected growth of the business: A Part 1 What is the project cash flow in year 3? 0+ decimals Submit Part 2 What is the NPV? 0+ decimals B 1 Year 1 2 Cost savings 20,000 The machine is to be linearly depreciated to zero and will have no resale value after 3 years. The company uses a discount rate of 11% and has a tax rate of 21%. Submit с 2 22,000 D 3 26,400 BAttempt 1/5 BAttempt 1/5

Intro The local franchise of Jiffy Lube is thinking of buying a new lift for $80,000 that would make it easier to access the oil filter in customers' cars and save labor. The savings would increase over the project's 3-year life, in line with the projected growth of the business: A Part 1 What is the project cash flow in year 3? 0+ decimals Submit Part 2 What is the NPV? 0+ decimals B 1 Year 1 2 Cost savings 20,000 The machine is to be linearly depreciated to zero and will have no resale value after 3 years. The company uses a discount rate of 11% and has a tax rate of 21%. Submit с 2 22,000 D 3 26,400 BAttempt 1/5 BAttempt 1/5

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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Calculate the equivalent future amount in year 4 that a company is paying for the dozer at 4% per year if the price of the price of the bulldozer now $100,000 (Draw the cash flow diagram) e
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You currently work at Happy home Construction company The government offered the company 4 projects to undertake in building houses Management is trying to select the best investment from among these alternative independent projects. Each alternative involves an initial outlay of $160,000 and a 10% cost of capital. Management requires that all project investments should be recovered in 4 years. Their cash flows are as follows: Year Kinstown St Christina St Thomp St Bess 1 60,000 40,000 41,000 0 2 50,000 60,000 41,000 60,000 3 40,000 0 41,000 0 4 30,000 40,000 41,000 56,000 5 20,000 20,000 41,000 50,000 6 8,000 60,000 0 80,000 3a. Distinguish between Capital Expenditure and Revenue Expenditure citing,THREE examples of each. b.Explain the time value of money and the role of cost of capital in appraising investments. PLEASE DO QUESTION 3 A-B
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