ACCT 556 help A Guide to career/Snaptutorial ACCT 556 help A Guide to career/Snaptutorial | Page 7
Week 4 Capital Budgeting Practice problem:
You have the following data about a proposed project:
Cost of new equipment
$80,000
Increase need for Working Capital (to be released at end of project)
$20,000
Length of project
6
years
Salvage Value of equipment at end of project
$8,000
Annual cash savings if equipment is purchased (cash inflows)
$28,500
Tax rate
35%
Discount rate required of all investements 14%
Required: