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Author Question: Party Place is considering a new investment whose data are shown below. Assume the equipment that ... (Read 15 times)

xman15.

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on: Aug 7, 2023
Party Place is considering a new investment whose data are shown below. Assume the equipment that would be used would have a constant annual capital cost allowance over the project’s 3-year life and a zero salvage value. This project would require some additional working capital that would be recovered at the end of the project’s life. Revenues and cash operating costs are expected to be constant over the project’s 3-year life. What is the project’s NPV? (Hint: Cash flows are constant in Years 1 to 3. CCA is modified to smooth out the calculations.)

​

WACC

11%

Net investment in fixed assets (basis)

$85,920

Required new working capital

$20,000

Annual capital cost allowance

$28,640

Sales revenues, each year

$82,000

Cash operating costs, each year

$30,000

Tax rate

37%

​


◦

$10,112


◦

$15,286


◦

$12,584


◦

$13,913

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by xman15. on Aug 7, 2023

hillard sane

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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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xman15.

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Reply 2 on: Aug 7, 2023
Great answer, keep it coming :)

frankwu0507

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Reply 3 on: Yesterday
Excellent

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