QUESTION 15 You and your freshman roommate started a company that makes T-shirts. The two of you have decided to expand

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Question 15 You And Your Freshman Roommate Started A Company That Makes T Shirts The Two Of You Have Decided To Expand 1 (39.28 KiB) Viewed 34 times

QUESTION 15 You and your freshman roommate started a company that makes T-shirts. The two of you have decided to expand and start manufacturing face masks. To do so will require purchasing new equipment. You have the following information on this investment project, what are the after-tax cash flows that it is expected to generate? (my answers are in thousands) Cost of new machinery: $80,000 • Expected life of machinery: 5 years • Expected Salvage Value of new machinery after 5 years: $20,000 Depreciation method: straight line • Expected sales of hats: $130,000 per year Cost of raw material: $70,000 per year Cost of additional labor: $30,000 per year • Additional Net Working Capital required at the start of the project: $20,000 • Tax rate: 35%. Oa-80/30.9/30.9/30.9/30.9/44.6 O b.-100/25.1/25.1/25.1/25.1/58.1 Oc-100/30.9/30.9/30.9/30.9/58.1 O d.-80/16.9/16.9/16.9/16.9/65.1 Oe-100/ 31.6 / 31.6 / 31.631.6 / 64.6