Your firm is contemplating purchasing a new piece of equipment that would allow for additional production. Project details: Equipment cost $82,000, installation cost $8,000. MACRS 3 year. EBITDA has been calculated to be $30,000 year 1, $50,000 year 2, $30,000 year 3. The equipment can be sold at the end of the 3 years for $10,000. Tax rate 30% WACC 10% 1. What is the NPV and IRR for this project. 2. If WACC increases to 12% what will be the NPV and IRR for the project?

Your firm is contemplating purchasing a new piece of equipment that would allow for additional production. Project details: Equipment cost $82,000, installation cost $8,000. MACRS 3 year. EBITDA has been calculated to be $30,000 year 1, $50,000 year 2, $30,000 year 3. The equipment can be sold at the end of the 3 years for $10,000. Tax rate 30% WACC 10% 1. What is the NPV and IRR for this project. 2. If WACC increases to 12% what will be the NPV and IRR for the project?

College Algebra

10th Edition

ISBN:9781337282291

Author:Ron Larson

Publisher:Ron Larson

Chapter1: Equations, Inequalities, And Mathematical Modeling

Section1.3: Modeling With Linear Equations

Problem 3ECP: Your family has annual loan payments equal to 28 of its annual income. During theyear, the loan...

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