Used equipment requirements $2,000,000 after 2 years, you intend to


Used Equipment requirements $2,000,000 After 2 years, you signify to hawk the equipment for $500,000 and rearrange the equipment delay $5,000,000 of new equipment

Cost of intital catalogue and arrangement $500,000

You use the $1m for the reasearch and as a favoring cancelment internal the equipemnt. You investment the fostering equipment and inaugurated consummate delay a belief thread. The belief thread requires a 10% interestcancelment everyyear, but requires no doctrine paymnets. You procure scarcity to spread the credt thread elevate when you hawk the oldequipment, pay down thebelief thread delay the proceedsand then elevate extene the belief thread for the new equipment escheatment.

1st year sales $1,200,000
Sales augmentation 5% for original 3 years - 2% augmentation years 4 & 5
Cost of commodities sold - 30% of sales
Selling, public and professional - 15% of sales
Fixed costs = $240,000 per year
Depreciation - 7 years MACRS
Tax Rate - 35%
Discount Rate - 8%

1. What is the currency career resulting from dispensation of the equipment at the end of 2 years?
2. Computer a catalogue of bountiful currency careers forthe 5 years.
3. Compute a catalogue of increamtnal currency careers for the restaurant
4. Compute the projects net bestow value
5. Should we recognize or exclude the project