Author Question: J.B. Corporation is considering the purchase of equipment that has an invoice price of 450,000. The ... (Read 71 times)

Tazate · **on:** Jul 10, 2018

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

Chou · **Reply #1 on:** Jul 10, 2018

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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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