a. Use exhibits 26-3 and 26-4 to help compute the net present value of the proposal to sell the existing equipment and buy the laser printer, discounted at an annual rate of 15 percent. In you computation, make the following assumptions regarding the timing of cash flows. 1. The purchase price of the laser printer will be paid in cash immediately. 2. The $200,000 sales price of the existing equipment will be received in cash immediately. 3. The income tax benefit from selling the equipment will be realized one year from today.
a. Use exhibits 26-3 and 26-4 to help compute the net present value of the proposal to sell the existing equipment and buy the laser printer, discounted at an annual rate of 15 percent. In you computation, make the following assumptions regarding the timing of cash flows. 1. The purchase price of the laser printer will be paid in cash immediately. 2. The $200,000 sales price of the existing equipment will be received in cash immediately. 3. The income tax benefit from selling the equipment will be realized one year from today.
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 9P
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a. Use exhibits 26-3 and 26-4 to help compute the
1. The purchase price of the laser printer will be paid in cash immediately.
2. The $200,000 sales price of the existing equipment will be received in cash immediately.
3. The income tax benefit from selling the equipment will be realized one year from today.
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