Nine Point Industries is trying to decide whether to invest in equipment to manufacture a ne product. If the investment project is accepted, sales revenue will increase by $94,000 per year and materials costs will decrease by $37,000 per year. The equipment will cost $148,000 and is depreciable over 8 years using simplified straight line (zero salvage value). The firm has a marginal tax rate of 34%. Calculate the firm's annual cash flows resulting from the new project. Set your calculator to 4 decimal places and round to a whole number at the end. For example, if your answer is 1,000 enter it as 1000. DO NOT ENTER THE DOLLAR SIGN.
Nine Point Industries is trying to decide whether to invest in equipment to manufacture a ne product. If the investment project is accepted, sales revenue will increase by $94,000 per year and materials costs will decrease by $37,000 per year. The equipment will cost $148,000 and is depreciable over 8 years using simplified straight line (zero salvage value). The firm has a marginal tax rate of 34%. Calculate the firm's annual cash flows resulting from the new project. Set your calculator to 4 decimal places and round to a whole number at the end. For example, if your answer is 1,000 enter it as 1000. DO NOT ENTER THE DOLLAR SIGN.
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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Transcribed Image Text:Nine Point Industries is trying to decide whether to invest in equipment to manufacture a new
product. If the investment project is accepted, sales revenue will increase by $94,000 per year
and materials costs will decrease by $37,000 per year. The equipment will cost $148,000 and is
depreciable over 8 years using simplified straight line (zero salvage value). The firm has a
marginal tax rate of 34%. Calculate the firm's annual cash flows resulting from the new project.
Set your calculator to 4 decimal places and round to a whole number at the end. For example, if
your answer is 1,000 enter it as 1000. DO NOT ENTER THE DOLLAR SIGN.
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