Question

the proj NPV and Modified A 01. ICA I! Year 2? Year 3? What is the new NPV? Modified ACRS LLO1] In the previous problem, suppose the fixed asset falls into the three-year MACRS class. All the other facts are the same. What roiect's Year 1 net cash flow now? Year 2? Year 3? What is the new NPV?! Droiect Evaluation (LO1] Dog Up! Franks is looking at a new sausage system with an installed cost of $540,000. This cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the sausage system can be scrapped for $80,000. The sausage system will save the firm $170,000 per year in pretax op- erating costs, and the system requires an initial investment in net working capital of $29,000. If the tax rate is 34 percent and the discount rate is 10 percent, what is the NPV of this project? 1 D . 1V Gumimaantamnlating the murehase of a new

Hi,
Could you show me how to solve #13 for NPV using only a financial calculator please?

Thank you very much in advance!

Answer 1

NPV using the financial calculator.

Press the CF button.
After that press 2nd+ CE|C

Now Enter the data as follows:
CF0 = -569,000 and press Enter
C01 = 148,920 and press Enter
F01 = 4 and press Enter
C02 = 230,720 and press Enter.

Now press CPT+ NPV

and I = 10 and press Enter
Down arrow + CPT

NPV = $46,315.3299

Cost post working capital CFO = -(540,000 + 29 000) = -5,69,000 CFI - 170,000 (1-0-34) + 540,000 (0-34) > 148,920 Aftee tax cashflow ir tox benefit due to de preciation FOI = 4 &F 2 = 148.920 + 80,000 (1-0.6) + 29 ovos 230,720 salvage flow afta tax working Capital release