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Author Question: Easy Payment Loan Company is thinking of opening a new office, and the key data are shown below. ... (Read 82 times)

isam

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on: Aug 7, 2023
Easy Payment Loan Company is thinking of opening a new office, and the key data are shown below. Easy Payment owns the building, free and clear, and it would sell it for $120,000 after taxes if the company decides not to open the new office. The equipment that would be used would be depreciated by the straight-line method over the project’s 3-year life, and would have a zero salvage value. An extra $6,000 of new working capital would be required to get this project running. Revenues and cash operating costs would be constant over the project’s 3-year life. What is the project’s NPV? (Hint: Cash flows are constant in Years 1–3 and the increased working capital will be recovered when this project ends. A simplified CCA is for mathematical convenience.)
WACC 9%
Net equipment capital cost

$85,650

Annual CCA deduction for equipment

$28,550

Sales revenues, each year

$210,000

Cash operating costs, each year

$30,000

Tax rate 36%

​

 10.0%

◦

$116,940


◦

$110,604


◦

$118,672


◦

$119,915

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by isam on Aug 7, 2023

lactosetheintolerant

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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isam

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Reply 2 on: Aug 7, 2023
Thanks for the timely response, appreciate it

Mochi

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Reply 3 on: Yesterday
Wow, this really help

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