### Project Evaluation for Temple Corp. Temple Corp. is considering a new project, and the relevant financial data for this evaluation are provided below. This information will help determine the project's Net Present Value (NPV).- **Risk-Adjusted WACC (Weighted Average Cost of Capital):** 10.0%- **Equipment Cost:** $63,800- **Sales Revenues (Each Year):** $51,400- **Annual Operating Costs:** $21,500- **Tax Rate:** 25.0%- **Project Life:** 3 years### Key Points:1. **Depreciation:** - Under the new tax law, the equipment used in the project qualifies for 100% bonus depreciation, meaning it will be fully depreciated in the first year (at t = 0). - The equipment will have a **zero salvage value** at the end of the project's life.2. **Working Capital:** - There will be **no change in net operating working capital (NOWC) required** for this project.3. **Revenue and Costs:** - Revenues and operating costs are expected to remain constant over the 3-year duration of the project.### Question:What is the project's NPV? Do not round the intermediate calculations and round the final answer to the nearest whole number.### NPV Calculation Options:a. $7,918 b. $12,268 c. $13,494 d. $5,189 e. $10,557 Please refer to the given financial data and use the appropriate financial formulas to calculate the Net Present Value (NPV) of the project.

Net present value (NPV) is the value of all the cash flow of the investment (positive and negative)…

Temple Corp. is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life. Under the new tax law, the equipment used in the project is eligible for 100% bonus depreciation, so it will be fully depreciated at t = 0. The equipment would have a zero salvage value at the end of the project's life. No change in net operating working capital (NOWC) would be required. Revenues and operating costs are expected to be constant over the project's 3-year life. What is the project's NPV? Do not round the intermediate calculations and round the final answer to the nearest whole number. Risk-adjusted WACC Equipment cost Sales revenues, each year Annual operating costs Tax rate a. $7,918 b. $12,268 c. $13,494 d. $5,189 e. $10,557 10.0% $63,800 $51,400 $21,500 25.0%

Temple Corp. is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life. Under the new tax law, the equipment used in the project is eligible for 100% bonus depreciation, so it will be fully depreciated at t = 0. The equipment would have a zero salvage value at the end of the project's life. No change in net operating working capital (NOWC) would be required. Revenues and operating costs are expected to be constant over the project's 3-year life. What is the project's NPV? Do not round the intermediate calculations and round the final answer to the nearest whole number. Risk-adjusted WACC Equipment cost Sales revenues, each year Annual operating costs Tax rate a. $7,918 b. $12,268 c. $13,494 d. $5,189 e. $10,557 10.0% $63,800 $51,400 $21,500 25.0%

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 4PA: Net present value method, internal rate of return method, and analysis for a service company The...

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