Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.38 mill
ion. The fixed asset falls into the three-year MACRS class (MACRS schedule). The project is estimated to generate $1,760,000 in annual sales, with costs of $660,000. The project requires an initial investment in net working capital of $350,000, and the fixed asset will have a market value of $330,000 at the end of the project. a. If the tax rate is 25 percent, what is the project’s Year 0 net cash flow? Year 1? Year 2? Year 3? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to two decimal places, e.g., 1,234,567.89.) b. If the required return is 10 percent, what is the project's NPV? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to two decimal places, e.g., 1,234,567.89.)
1 answer:
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Answer:
And in order to solve this we have two possibilities:
Solution 1
And solving for T we got:
Solution 2
And the other options would be:
Step-by-step explanation:
For this case we can define the variable os interest T as the real temperature and we know that if we are 3 F more than the value of 98.6 we will be unhealthy so we can set up the following equation:
And in order to solve this we have two possibilities:
Solution 1
And solving for T we got:
Solution 2
And the other options would be: