Problem 2- Evaluating a Cost Saving Project Year 0 Acquisition - 5 Year Life Earth Mover Installation Costs Total Initia

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Problem 2 Evaluating A Cost Saving Project Year 0 Acquisition 5 Year Life Earth Mover Installation Costs Total Initia 1 (10.01 KiB) Viewed 8 times

Problem 2- Evaluating a Cost Saving Project Year 0 Acquisition - 5 Year Life Earth Mover Installation Costs Total Initial Investment Savings in Costs Depreciation Rate (5 Year) Total Depreciation Costs ings Before Income Tax (EBIT) Tax Rate Total Taxes det Operating Profits (NOPAT) Add Back Depreciation Operating Cash Flow Net Operating Working Capital ?? Increase in NOVC ?? otal Annual Project Cash Flow ?? Terminal Year Cash Flow Machine Sale Less: Book Value of Machine Profit on Sale Tax on Profit (25%) et Salvage Value on Equipment (220,000) (30,000) $ ?? ?? ?? ?? ?? Year 1 ?? ?? ?? ?? 52,000 $ 2.00% ?? (50,000) ?? ?? ?? ?? ?? ?? Year 2 ?? ?? ?? ?? 52,000 $ ?? ?? ?? ?? ?? ?? ?? Year 3 ?? ?? ?? ?? 52,000 $ ?? ?? ?? ?? ?? ?? ?? Year 4 ?? ?? ?? ?? ?? ?? ?? ?? ?? 52,000