Mahendra amp mahendra an india conglomerate is investing, Ask an Expert

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Mahendra & Mahendra, an India conglomerate is investing $10,000 to buy an equipment. The equipment will last five years and will depreciate straight line. The firm hopes to generate revenue of $14,000 every year with an EBIT margin of 40%. The firm would need NWC investment equal to 10% of annual revenue. Estimate the FCF for the project for the first five years.

In the above problem, if the firm hopes to sell the equipment for $2,000 at the end of five years and faces a tax rate of 35%, what is the after-tax salvage value?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92417434

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