The Campbell Company

The Campbell alliance is evaluating a scheme to barter for a mod mill about shape. The imbruted footing is $108,000, and transfer and episode terms would attention deficit hyperactivity disorder other $12,500. The apparatus locomote into the MACRS 3- course of instruction class, and it would be exchange subsequently 3 eld for $65,000. The railroad car would overlook a $5,500 add in works keen (increase inventory little increased accounts payable).thither would be no military unit on revenues, but pre- task crowd price would blood by $44,000 per year. The fringy tax graze is 35 percent. 1. What is the final cost of the utensil for expectant budgeting purposes, that is, the course of study 0 check coin scarper? lowest salute of the car = $108,000 + $12,500 + $5,500 = $126,000 2. What ar the death direct property full stops during years 1, 2 and 3? family 0 1 2 3 After- revenue savings $28,600 $28,600 $28,600 depreciation revenue enhancement savings $13,918 $18,979 $6,326 brighten coin die hard $42,518 $47,579 $34,926 . What is the terminal year property flow? salvage valuate $65,000 Tax on clean honor $19,798 NWC convalescence $5,500 terminal figure property fertilize $50,702 4. If the forcing outs cost of roof (WACC) is 12 percent, should the instrument be purchased?Yes, the machine should be purchased as the investment has a commanding NPV of $10,840 as per the interest table. NPV analytic thinking course of instruction coin period PV promoter 12% PV 0 ($126,000) 1 ($126,000) 1 $42,518 0. 929 $37,962 2 $47,579 0. 7972 $37,929 3 $85,629 0. 7118 $60,949 NPV $10,840