There is old machinery with a value of $95,565, with an expected life of 20 years. There is a sale of old equipment with a book value of $30,000 and a market value of $66,000. It is intended to replace that machine with a new one worth $145,000 with a useful life of 10 years. It will ultimately be sold at market value for $90,000, to generate salvage value. Old operating costs are $95,565 and new costs are $56,984. There is an initial working capital of $35,000, with movements of 15% of the initial working capital until year 6. From year 7 and 8 they are 20% of the initial working capital and in the ninth year 14% of the initial working capital. The WACC required for this project is 17% with a tax rate of 38.5%. The following table shows the depreciation of the new equipment. Depreciation 1 20%
There is old machinery with a value of $95,565, with an expected life of 20 years. There is a sale of old equipment with a book value of $30,000 and a market value of $66,000.
It is intended to replace that machine with a new one worth $145,000 with a useful life of 10 years. It will ultimately be sold at market value for $90,000, to generate salvage value.
Old operating costs are $95,565 and new costs are $56,984. There is an initial working capital of $35,000, with movements of 15% of the initial working capital until
year 6. From year 7 and 8 they are 20% of the initial working capital and in the ninth year 14% of the initial working capital.
The WACC required for this project is 17% with a tax rate of 38.5%. The following table shows the
Depreciation
1 20%
2 15%
3 15%
4 10%
5 10%
6 10%
7 7%
8 5%
9 5%
10 3%
Calculate your PV,
Please if you can send me the excel to: 0229275@up.edu.mx
or tell me the steps to follow and if you can make a screenshot of the excel already done
Thank you
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