Bourque Enterprises is considering a new project. The project will generate sales of $1.5 million, $2.2 million, $2.1 million, and $1.6 million over the next four years, respectively. The fixed assets required for the project will cost $2.4 million and will be eligible for 100 percent bonus depreciation. At the end of the project, the fixed assets can be sold for $205,000. Variable costs will be 25 percent of sales and fixed costs will be $425,000 per year. The project will require NWC equal to 20 percent of sales that must be accumulated in the year prior to sales. The required return on the project is 11 and the tax rate is 22 percent. What is the NPV of the project?
Bourque Enterprises is considering a new project. The project will generate sales of $1.5 million, $2.2...
Bourque Enterprises is considering a new project. The project will generate sales of $1.3 million, $1.8 million, $1.7 million, and $1.2 million over the next four years, respectively. The fixed assets required for the project will cost $1.7 million and will be eligible for 100 percent bonus depreciation. At the end of the project, the fixed assets can be sold for $185,000. Variable costs will be 20 percent of sales and fixed costs will be $440,000 per year. The project...
Eggz, Inc., is considering the purchase of new equipment that will allow the company to collect loose hen feathers for sale. The equipment will cost $425,000 and will be eligible for 100 percent bonus depreciation. The equipment can be sold for $45,000 at the end of the project in five years. Sales would be $275,000 per year, with annual fixed costs of $47,000 and variable costs equal to 35 percent of sales. The project would require an investment of $25,000...
Eggz, Inc., is considering the purchase of new equipment that will allow the company to collect loose hen feathers for sale. The equipment will cost $425,000 and will be eligible for 100 percent bonus depreciation. The equipment can be sold for $45,000 at the end of the project in five years. Sales would be $275,000 per year, with annual fixed costs of $47,000 and variable costs equal to 35 percent of sales. The project would require an investment of $25,000...
Eggz, Inc., is considering the purchase of new equipment that will allow the company to collect loose hen feathers for sale. The equipment will cost $525,000 and will be eligible for 100 percent bonus depreciation. The equipment can be sold for $105,000 at the end of the project in 5 years. Sales would be $355,000 per year, with annual fixed costs of $67,000 and variable costs equal to 37 percent of sales. The project would require an investment of $65,000...
Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.33 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1,735,000 in annual sales, with costs of $645,000. The tax rate is 25 percent and the required return on the project is 10 percent. What is the project’s NPV?
Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.31 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1,785,000 in annual sales, with costs of $695,000. The tax rate is 25 percent and the required return on the project is 12 percent. What is the project’s NPV?
quad enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of 2.38 million.The fixed asset qualifies for 100 percent bonus depreciation in the first year. The project is estimated to generate 1,805,000 in annual sales, with costs of 696,000. The project requires an initial investment in net working capital of 440,000, and the fixed asset will have a market value of 465,000 at the end of the project. a. If the tax rate is...
Eggz, Inc., is considering the purchase of new equipment that will allow the company to collect loose hen feathers for sale. The equipment will cost $440,000 and will be eligible for 100 percent bonus depreciation. The equipment can be sold for $54,000 at the end of the project in 5 years. Sales would be $287,000 per year, with annual fixed costs of $50,000 and variable costs equal to 37 percent of sales. The project would require an investment of $31,000...
Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.43 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life and is estimated to have a market value of $281,289 at the end of the project. The project is estimated to generate $2,102,812 in annual sales, with costs of $805,313. The project requires an initial investment in net working capital of $361,924. If the tax rate is...
Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.41 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life and is estimated to have a market value of $213,186 at the end of the project. The project is estimated to generate $2,105,355 in annual sales, with costs of $883,025. The project requires an initial investment in net working capital of $377,259. If the tax rate is...