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Author Question: J.B. Corporation is considering the purchase of equipment that has an invoice price of 450,000. The ... (Read 67 times)

Tazate

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J.B. Corporation is considering the purchase of equipment that has an invoice price of 450,000. The equipment
  was recommended by a consulting firm that did an analysis for J.B. Corporation. J.B. paid the consulting firm
  12,000 for its report.
 
  The cost of shipping and installation is 50,000. The equipment will be depreciated on a
  straight-line basis over its useful life of 10 years, assuming no salvage value. The equipment will replace
  existing assets that have a current book value of 100,000 and which could be sold for 150,000. Additional net
  working capital of 15,000 will be required to maintain the equipment and to support higher sales. J.B.'s
  marginal tax rate is 40. Calculate the initial outlay required to fund this project.

Question 2

Both the profitability index (PI) and net present value (NPV) are based on the present value of all
  future free cash flows, but the PI is a relative measure while the NPV is an absolute measure of a
  project's desirability.
 
  Indicate whether the statement is true or false


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Chou

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Tazate

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Reply 2 on: Jul 10, 2018
Excellent


abro1885

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Reply 3 on: Yesterday
Wow, this really help

 

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