Home / Questions / Incremental cash flows and NPV Procter & Gamble is considering buying a new machine that c...
Incremental cash flows and NPV) Procter & Gamble is considering buying a new machine that costs $100,000. The machine requires $8,000 in setup costs that are expensed immediately and $12,000 in additional working capital. The machine's useful like is 10 years, after which it can be sold for a salvage value of $30,000. The machine requires a maintenance overhaul costing $14,000 at the end of year 7. The overhaul is fully expensed when it is done. P&G uses straight-line depreciation, and the machine will be depreciated to a book value of zero on a six-year basis. P&G has a tax rate of 40% and the project's cost of capital is 13%. The machine is expected to increase revenues minus expenses by $55,000 per year. What is the NPV of buying the machine?
Possible answers:
-$46,321.89 |
||
-$23,389.21 |
||
-$455.93 |
||
$924.45 |
||
$21,588.71 |
||
$36,833.33 |
||
$57,222.22 |
||
$87,395.33 |
||
$94,183.52 |
Apr 03 2020 View more View Less
In the numerical example of Hamburger Heaven’s production function in Chapter 6, we examined the consequences of the invention of a self-flipping burger that changed th...
Mar 30 2020The following cost data relate to the manufacturing activities of Black Company during the just-completed year:Manufacturing overhead costs:Property taxes, factory4,300Ut...
Feb 06 2020Find vO in the circuit of Figure P2−34.
Jun 15 2020Compute the forces in the members of the cantilever truss shown if the diagonals are unable to carry any compression.
May 25 2020On what basis shall we allocate resources to program A instead of program B,” is the perennial statement in public sector budgeting. Identify and discuss at least five ...
May 14 2018The Corona Sporting Company makes two types of balls: Soccer balls and Cork balls. The making of each soccer ball and cork ball requires 3 hours and 4 hours of production...
Apr 16 2021The essential function of 21st-century human resource management personnel is to work in partnership with the management and staff of the organisation to develop the coll...
Jul 25 2020The Health Care Cost Institute tracks health care expenditures for beneficiaries under the age of 65 who are covered by employer-sponsored private health insurance (Healt...
Jun 19 2020The progressive discipline process described in this chapter is meant to be fair and understandable, but it tends to be slow. Try to think of two or three offenses that s...
May 30 2020Explain this statement: Etiology, impairment, disability, and handicap can be thought of as points along a continuum.
Mar 21 2020