A company is considering a new salsa whose data are shown below. The equipment to be used would be
| WACC |
10.0% |
| Pre-tax cash flow reduction for other products (cannibalization) |
-$5,000 |
| Investment cost (depreciable basis) |
$80,000 |
| Straight-line depr. rate |
33.333% |
| Annual sales revenues |
$65,500 |
| Annual operating costs (excl. depr.) |
-$25,000 |
| Tax rate |
35.0% |
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
