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The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a...

The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $40,000, and it falls into the MACRS 3-year class. Purchase of the computer would require an increase in net operating working capital of $2,000. The computer would increase the firm's before-tax revenues by $20,000 per year but would also increase operating costs by $5,000 per year. The computer is expected to be used for 3 years and then be sold for $25,000. The firm's marginal tax rate is 40 percent, and the project's cost of capital is 14 percent.What is the operating cash flow in Year 2?

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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

Home nert Page Layout Formulas Data Review View dd-Ins s Cut aCopy Σ AutoSum ー E ゴWrap Text в 1 프 . Ej-., Δ. : rーー 逻锂函Merge & Center. $, % , 弼,8 C Conditional Format CeInsert Delete Format Formatting, as Table w styles. ▼ ㆆ ▼ Sort &Find & 2 ClearFe Select Edting Format Painter Clipboard Alignment Number Cells Y132 XZ YA YB YC YD YE YF YG YH YK YL YM 19 20 21 YEAR COST OF COMPUTER WORKING CAPITAL 0 CALCULATION OF DEPRECIATION COST 40000 YEAR 23 24 25 26 27 28 29 30 31 32 2000 MACRS DEPRECIATION 1 33.33 13332.00 2 44.45 17780.00 3 14.81 5924.00 4 INCREASE IN REVENUE OPERATING COST DEPRECIATION EARNINGS BEFORE TAX TAXES NET INCOME DEPRECIATION OPERATING CASH FLOW 20000 20000 20000 5000 5000 000 13332.00 17780.00 5924.00 1668.00-2780.00 9076.00 667.2 -1112 3630.4 1668 5445.6 13332.00 17780.00 5924.00 14332.8 16112 11369.6 7.41 2964.00 1000.8 16112 34 35 36 37 11 r ANSWER MIRR NPV İRR , REPLACEMENT S /HPR GMAM LEAC MACRS RATIOCASHBUDGET / wacc , BOND . EPS EBIT , REPLACEMENT , STats | NPV . BETA LEVERED 匂 rences: DX15 福 130%

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