Webster Corp. is planning to build a new shipping depot. The initial cost of the investment is $1.18 million. Efficiencies from the new depot are expected to reduce aftertax annual costs by $105,000 forever. The corporation has a total value of $62.4 million and has outstanding debt of $38.7 million. What is the NPV of the project if the firm has an aftertax cost of debt of 5.8 percent and a cost equity of 12.6 percent?
A) $72,581
B) $46,509
C) $163,669
D) ?$102,422
E) ?$531,736
A) $72,581
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Which of the following is not one of the benefits of using a wireless network?
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Which federal statute protects the privacy and confidentiality of patient information?
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A company is trying to decide which of two new product lines to introduce in the coming year. The company requires a 12% return on investment. The predicted revenue and cost data for each product line follows: ? Product A Product BUnit sales25,00020,000Unit sales price$ 30$ 30Direct materials$15,000$8,000Direct labor$120,000$80,000Other cash operating expenses$30,000$25,000New equipment costs$2,500,000$1,500,000Estimated useful life (no salvage)5 years5 yearsThe company has a 30% tax rate and it uses the straight-line depreciation method. The present value of an annuity of 1 for 5 years at 12% is 3.6048. Compute the net present value for each piece of equipment under each of the two product lines. Which, if either of these two investments is acceptable?
What will be an ideal response?