Market Top Investors, Inc., is considering the purchase of a $355,000 computer with an economic life of four years. The computer will be fully depreciated over four years using the straight-line method, at which time it will be worth $102,000. The computer will replace two office employees whose combined annual salaries are $93,000. The machine will also immediately lower the firm’s required net working capital by $82,000. This amount of net working capital will need to be replaced once the machine is sold. The corporate tax rate is 22 percent. The appropriate discount rate is 11 percent. Calculate the NPV of this project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Is it worthwhile to buy the computer? No Yes
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Market Top Investors, Inc., is considering the purchase of a $355,000 computer with an economic life...
Market Top Investors, Inc., is considering the purchase of a $485,000 computer with an economic life of six years. The computer will be fully depreciated over six years using the straight-line method, at which time it will be worth $132,000. The computer will replace two office employees whose combined annual salaries are $98,000. The machine will also immediately lower the firm’s required net working capital by $87,000. This amount of net working capital will need to be replaced once the...
Market Top Investors, Inc., is considering the purchase of a $480,000 computer with an economic life of six years. The computer will be fully depreciated over six years using the straight-line method, at which time it will be worth $138,000. The computer will replace two office employees whose combined annual salaries are $99,000. The machine will also immediately lower the firm’s required net working capital by $88,000. This amount of net working capital will need to be replaced once the...
Market Top Investors, Inc., is considering the purchase of a $335,000 computer with an economic life of four years. The computer will be fully depreciated over four years using the straight-line method, at which time it will be worth $90,000. The computer will replace two office employees whose combined annual salaries are $91,000. The machine will also immediately lower the firm’s required net working capital by $80,000. This amount of net working capital will need to be replaced once the...
Market Top Investors, Inc., is considering the purchase of a $335,000 computer with an economic life of four years. The computer will be fully depreciated over four years using the straight-line method, at which time it will be worth $90,000. The computer will replace two office employees whose combined annual salaries are $91,000. The machine will also immediately lower the firm’s required net working capital by $80,000. This amount of net working capital will need to be replaced once the...
Market Top Investors, Inc., is considering the purchase of a $485,000 computer with an economic life of six years. The computer will be fully depreciated over six years using the straight-line method, at which time it will be worth $150,000. The computer will replace two office employees whose combined annual salaries are $101,000. The machine will also immediately lower the firm’s required net working capital by $90,000. This amount of net working capital will need to be replaced once the...
Market Top Investors, Inc., is considering the purchase of a $345,000 computer with an economic life of five years. The computer will be fully depreciated over five years using the straight-line method, at which time it will be worth $78,000. The computer will replace two office employees whose combined annual salaries are $89,000. The machine will also immediately lower the firm’s required net working capital by $78,000. This amount of net working capital will need to be replaced once the...
Market Top Investors, Inc., is considering the purchase of a $345,000 computer with an economic life of five years. The computer will be fully depreciated over five years using the straight-line method, at which time it will be worth $78,000. The computer will replace two office employees whose combined annual salaries are $89,000. The machine will also immediately lower the firm’s required net working capital by $78,000. This amount of net working capital will need to be replaced once the...
Market Top Investors, Inc., is considering the purchase of a $345,000 computer with an economic life of five years. The computer will be fully depreciated over five years using the straight-line method, at which time it will be worth $60,000. The computer will replace two office employees whose combined annual salaries are $86,000. The machine will also immediately lower the firm’s required net working capital by $75,000. This amount of net working capital will need to be replaced once the...
Norwegian Investors, Inc., is considering the purchase of a $400,000 computer with an economic life offour years. The computer will be fully depreciated over four years using the straight-line method. Themarket value of the computer will be $80,000 in four years. The computer will replace five officeemployees whose combined annual salaries are $175,000 but will also require a new IT employee that will cost $50,000 annually, plus a bonus sign of $20,000. The machine will also immediately lower the firm’srequired net...
Project Analysis and Inflation Dickinson Brothers, Inc., is considering investing in a machine to produce computer keyboards. The price of the machine will be $1.2 million, and its economic life is five years. The machine will be fully depreciated by the straight- line method. The machine will produce 25,000 keyboards each year. The price of each keyboard will be $47 in the first year and will increase by 3 percent per year. The production cost per keyboard will be $17...