QUESTION
91. Lakeside Winery is considering expanding its wine-making operations. The expansion will require new equipment costin
Category: Business
Subject: Finance
Due Date: 02/03/2016
Question Asked: 2016-02-03 03:16:48
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91. Lakeside Winery is considering
expanding its wine-making operations. The expansion will require new equipment
costing $649,000 that would be depreciated on a straight-line basis to a zero
balance over the 4-year life of the project. The estimated salvage value is
$187,000. The project requires $38,000 initially for net working capital, all
of which will be recouped at the end of the project. The projected operating
cash flow is $198,500 a year. What is the net present value of this project if
the relevant discount rate is 14 percent and the tax rate is 35 percent?
A. -$14,162
B. -$8,309
C. -$2,747
D. $2,311
E. $3,615
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91. Lakeside Winery is considering expanding its wine-making operations. The expansion will require new equipment costin
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...ed salvage value is $187,000. The project requires $38,000 initially for net working capital, all of which will be recouped at ...
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