Question

Fairfax Pizza is considering buying a new oven. The new oven would be purchased today for...

Fairfax Pizza is considering buying a new oven. The new oven would be purchased today for 21,200 dollars. It would be depreciated straight-line to 1,800 dollars over 2 years. In 2 years, the oven would be sold for an after-tax cash flow of 2,800 dollars. Without the new oven, costs are expected to be 13,800 dollars in 1 year and 19,700 in 2 years. With the new oven, costs are expected to be 1,400 dollars in 1 year and 12,200 in 2 years. If the tax rate is 50 percent and the cost of capital is 9.66 percent, what is the net present value of the new oven project?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Fairfax Pizza is considering buying a new oven. The new oven would be purchased today for...
Fairfax Pizza is considering buying a new oven. The new oven would be purchased today for 20,600 dollars. It would be depreciated straight-line to 1,400 dollars over 2 years. In 2 years, the oven would be sold for an after-tax cash flow of 2,600 dollars. Without the new oven, costs are expected to be 12,300 dollars in 1 year and 17,600 in 2 years. With the new oven, costs are expected to be -400 dollars in 1 year and 12,000...
Fairfax Pizza is considering buying a new oven. The new oven would be purchased today for...
Fairfax Pizza is considering buying a new oven. The new oven would be purchased today for 17,800 dollars. It would be depreciated straight-line to 1,200 dollars over 2 years. In 2 years, the oven would be sold for an after-tax cash flow of 1,800 dollars. Without the new oven, costs are expected to be 11,200 dollars in 1 year and 19,400 in 2 years. With the new oven, costs are expected to be -400 dollars in 1 year and 15,800...
Fairfax Pizza is considering buying a new oven. The new oven would be purchased today for...
Fairfax Pizza is considering buying a new oven. The new oven would be purchased today for 14,200 dollars. It would be depreciated straight-line to 1,000 dollars over 2 years. In 2 years, the oven would be sold for an after-tax cash flow of 2,300 dollars. Without the new oven, costs are expected to be 11,600 dollars in 1 year and 18,000 in 2 years. With the new oven, costs are expected to be 900 dollars in 1 year and 15,400...
Fairfax Pizza is considering buying a new oven. The new oven would be purchased today for...
Fairfax Pizza is considering buying a new oven. The new oven would be purchased today for 19,200 dollars. It would be depreciated straight-line to 1,200 dollars over 2 years. In 2 years, the oven would be sold for an after-tax cash flow of 2,600 dollars. Without the new oven, costs are expected to be 13,600 dollars in 1 year and 17,700 in 2 years. With the new oven, costs are expected to be 1,100 dollars in 1 year and 13,400...
Fairfax Pizza is considering buying a new oven. The new oven would be purchased today for...
Fairfax Pizza is considering buying a new oven. The new oven would be purchased today for 16,800 dollars. It would be depreciated straight-line to 1,200 dollars over 2 years. In 2 years, the oven would be sold for an after-tax cash flow of 2,000 dollars. Without the new oven, costs are expected to be 12,000 dollars in 1 year and 16,800 in 2 years. With the new oven, costs are expected to be 800 dollars in 1 year and 12,000...
Fairfax Pizza is considering buying a new oven. The new oven would be purchased today for...
Fairfax Pizza is considering buying a new oven. The new oven would be purchased today for 15,000 dollars. It would be depreciated straight-line to 2,200 dollars over 2 years. In 2 years, the oven would be sold for an after-tax cash flow of 3,500 dollars. Without the new oven, costs are expected to be 11,400 dollars in 1 year and 18,500 in 2 years. With the new oven, costs are expected to be 2,600 dollars in 1 year and 15,300...
Oxygen Optimization is considering buying a new purification system. The new system would be purchased today...
Oxygen Optimization is considering buying a new purification system. The new system would be purchased today for 18,400 dollars. It would be depreciated straight-line to 1,800 dollars over 2 years. In 2 years, the system would be sold and the after-tax cash flow from capital spending in year 2 would be 3,100 dollars. The system is expected to reduce costs by 5,400 dollars in year 1 and by 14,000 dollars in year 2. If the tax rate is 50 percent...
Oxygen Optimization is considering buying a new purification system. The new system would be purchased today...
Oxygen Optimization is considering buying a new purification system. The new system would be purchased today for 17,200 dollars. It would be depreciated straight-line to 2,200 dollars over 2 years. In 2 years, the system would be sold and the after-tax cash flow from capital spending in year 2 would be 3,500 dollars. The system is expected to reduce costs by 6,100 dollars in year 1 and by 12,400 dollars in year 2. If the tax rate is 50 percent...
Oxygen Optimization is considering buying a new purification system. The new system would be purchased today...
Oxygen Optimization is considering buying a new purification system. The new system would be purchased today for 20,200 dollars. It would be depreciated straight-line to 2,000 dollars over 2 years. In 2 years, the system would be sold and the after-tax cash flow from capital spending in year 2 would be 3,100 dollars. The system is expected to reduce costs by 7,800 dollars in year 1 and by 15,200 dollars in year 2. If the tax rate is 50 percent...
Oxygen Optimization is considering buying a new purification system. The new system would be purchased today...
Oxygen Optimization is considering buying a new purification system. The new system would be purchased today for 20,200 dollars. It would be depreciated straight-line to 2,000 dollars over 2 years. In 2 years, the system would be sold and the after-tax cash flow from capital spending in year 2 would be 2,600 dollars. The system is expected to reduce costs by 7,400 dollars in year 1 and by 14,100 dollars in year 2. If the tax rate is 50 percent...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT