KADS, Incorporated has spent $300,000 on research to develop a new computer game. The firm is planning to spend $100,000 o machine to produce the new game. Shipping and installation costs of the machine will be capitalized and depreciated using bonus depreciated; they total $40,000. The machine has an expected life of three years, a $65,000 estimated resale value, and falls und the MACRS seven-year class life. Revenue from the new game is expected to be $500,000 per year, with costs of $150,000 per ye The firm has a tax rate of 21 percent, has an opportunity cost of capital of 13 percent, and expects net working capital to increase b $50,000 at the beginning of the project. What will the cash flows for this project be? Note: Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. Year FCF $ (190,000.00) Answer is not complete. 2 $ 3 390,706.20
KADS, Incorporated has spent $300,000 on research to develop a new computer game. The firm is planning to spend $100,000 o machine to produce the new game. Shipping and installation costs of the machine will be capitalized and depreciated using bonus depreciated; they total $40,000. The machine has an expected life of three years, a $65,000 estimated resale value, and falls und the MACRS seven-year class life. Revenue from the new game is expected to be $500,000 per year, with costs of $150,000 per ye The firm has a tax rate of 21 percent, has an opportunity cost of capital of 13 percent, and expects net working capital to increase b $50,000 at the beginning of the project. What will the cash flows for this project be? Note: Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. Year FCF $ (190,000.00) Answer is not complete. 2 $ 3 390,706.20
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 4P
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