solve the last bottom problem on paper 14. You are thinking about buying a printing press todaythat will print t-shirts for many years including thecelebration of a Men's Hockey National Championship.1.a. The machine will cost $15mm to buy and $1mm toinstall.b. For working capital, assume that you must havean increase in accounts receivable of $5mm, aninventory increase of $2mm and an accountspayable increase of $1mm. You will use themachine for regular printing jobs; these jobs willproduce $5mm of positive after-tax cash flow peryear (assume the cash flows start after one yearand end after 25 total years).c. The victory will produce a special one time extraafter-tax cash flow of $11.70mm in 5 years fromnow because of the National Championship.d. Your WACC is 15%. Your tax rate is 25%.e. At the end of 25 years, you shut down (andsell) the machine for $4mm and liquidate theworking capital. Assume the machine hadbeen depreciated to a tax value of $1mm.What is the NPV of the project? Round to the nearest$mm. $45mm would be the form of a correctanswer. Hint...you should come pretty close to a niceround number.||

14. You are thinking about buying a printing press today that will print t-shirts for many years including the celebration of a Men's Hockey National Championship. 1. a. The machine will cost $15mm to buy and $1mm to install. b. For working capital, assume that you must have an increase in accounts receivable of $5mm, an inventory increase of $2mm and an accounts payable increase of $1mm. You will use the machine for regular printing jobs; these jobs will

14. You are thinking about buying a printing press today that will print t-shirts for many years including the celebration of a Men's Hockey National Championship. 1. a. The machine will cost $15mm to buy and $1mm to install. b. For working capital, assume that you must have an increase in accounts receivable of $5mm, an inventory increase of $2mm and an accounts payable increase of $1mm. You will use the machine for regular printing jobs; these jobs will

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 1PA: Your company is planning to purchase a new log splitter for is lawn and garden business. The new...

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