Dinky Co. is considering a $100,000 copier which would be depreciated straight-i
ID: 2643267 • Letter: D
Question
Dinky Co. is considering a $100,000 copier which would be depreciated straight-ine, 5 years to $20,000 salvage. The copier would need $10,000 in net working capital [NWC]. Dinky thinks the copier could be sold in 5 years for $30,000. The copier would not produce any additional revenue but is expected to save $20,000 a year in labor costs for 5 years. Dinky's tax rate is 35% and its WACC is 6.36%. Is this an acceptable 5 year proposed project for Dinky?
Yes, the NPV = $19,500
No, the NPV = -$10,894.31
No, NPV = -$5,595
Yes, the NPV = $19,500
No, the NPV = -$10,894.31
No, NPV = -$5,595
Explanation / Answer
true answer is
No, the NPV = -$10,894.31
No, the NPV = -$10,894.31
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.