Nine Point Industries is trying to decide whether to invest in equipment to manufacture a ne product. If the investment project is accepted, sales revenue will increase by $94,000 per year and materials costs will decrease by $37,000 per year. The equipment will cost $148,000 and is depreciable over 8 years using simplified straight line (zero salvage value). The firm has a marginal tax rate of 34%. Calculate the firm's annual cash flows resulting from the new project. Set your calculator to 4 decimal places and round to a whole number at the end. For example, if your answer is 1,000 enter it as 1000. DO NOT ENTER THE DOLLAR SIGN.
Nine Point Industries is trying to decide whether to invest in equipment to manufacture a ne product. If the investment project is accepted, sales revenue will increase by $94,000 per year and materials costs will decrease by $37,000 per year. The equipment will cost $148,000 and is depreciable over 8 years using simplified straight line (zero salvage value). The firm has a marginal tax rate of 34%. Calculate the firm's annual cash flows resulting from the new project. Set your calculator to 4 decimal places and round to a whole number at the end. For example, if your answer is 1,000 enter it as 1000. DO NOT ENTER THE DOLLAR SIGN.
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 5P
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