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1) President of Speedy Copy has asked you to estimate proposed acquisition of new copier. Copier equipment is expected to cost= $30,000 and will be declined in straight-line manner for 3 years of asset’s life after which it will be valueless. Use of equipment will need the increase in net working capital (additional paper sizes that can be accommodated by new copier) of $4,000. Increased sales from Auburn University Finance faculty looking for working copier are expected to be= $20,000 per year with operating costs (excluding depreciation) of $5,000 per year. Compute initial outlay at t=0 and net cash flows for years 1-3. The speedy Copy’s marginal tax rate is= 40%.

Basic Finance, Finance

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  • Reference No.:- M914854

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