Required information A potential investment has a cost of $555,000 and a useful life of 6 years. Annual cash sales from the investment are expected to be $267,382 and annual cash operating expenses...


Required information<br>A potential investment has a cost of $555,000 and a useful life of 6 years. Annual cash sales from the investment are<br>expected to be $267,382 and annual cash operating expenses are expected to be $105,332. The expected salvage value<br>at the end of the investment's life is $70,000. The company uses straight-line depreciation for all assets based on the full<br>cost of the assets.<br>The company has a before-tax discount rate of 17%, an after-tax discount rate of 14%, and a tax rate of 30%.<br>Required:<br>1. Assume the company wants to consider this investment before-tax. (Round dollar amounts to the nearest whole dollar and IRR to<br>one decimal place (i.e. .055 = 5.5%). Enter negative amounts with a minus sign.)<br>Calculate the before-tax annual PMT of the investment<br>Calculate the before-tax FV of the investment<br>$<br>Calculate the before-tax NPV of the investment<br>$<br>Calculate the before-tax IRR of the investment<br>2. Assume the company wants to consider this investment after-tax. (Round dollar amounts to the nearest whole dollar and IRR<br>one<br>decimal place (i.e. .055 = 5.5%). Enter negative amounts with a minus sign.)<br>Calculate the after-tax annual PMT of the investment<br>Calculate the after-tax FV of the investment<br>2$<br>Calculate the after-tax NPV of the investment<br>Calculate the after-tax IRR of the investment<br>

Extracted text: Required information A potential investment has a cost of $555,000 and a useful life of 6 years. Annual cash sales from the investment are expected to be $267,382 and annual cash operating expenses are expected to be $105,332. The expected salvage value at the end of the investment's life is $70,000. The company uses straight-line depreciation for all assets based on the full cost of the assets. The company has a before-tax discount rate of 17%, an after-tax discount rate of 14%, and a tax rate of 30%. Required: 1. Assume the company wants to consider this investment before-tax. (Round dollar amounts to the nearest whole dollar and IRR to one decimal place (i.e. .055 = 5.5%). Enter negative amounts with a minus sign.) Calculate the before-tax annual PMT of the investment Calculate the before-tax FV of the investment $ Calculate the before-tax NPV of the investment $ Calculate the before-tax IRR of the investment 2. Assume the company wants to consider this investment after-tax. (Round dollar amounts to the nearest whole dollar and IRR one decimal place (i.e. .055 = 5.5%). Enter negative amounts with a minus sign.) Calculate the after-tax annual PMT of the investment Calculate the after-tax FV of the investment 2$ Calculate the after-tax NPV of the investment Calculate the after-tax IRR of the investment

Jun 04, 2022
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