00:01
Hello students, here is a question.
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St.
00:02
John's river shefford is considering a replacement of 8 years old, retriving machines with a new one that will increase an earning before depreciation.
00:10
So, here it is given as 27 ,000 to 20 ,000 per year.
00:15
The new machinery will cost for $90 ,000 and the estimated life will be 8 years of a salvage value and macrs recovered period.
00:25
So, the applicable depreciation rate will be 20%, 32%, 19 % and 12%, 11 % and 6%.
00:32
So, the applicable corporate tax is 40 % and the firm wacc will be 14%.
00:37
The old machinery has been fully depreciated and has no salvage value.
00:42
So, here what is the npv for the project? this is our question.
00:45
Let us discuss the answer for this.
00:47
So, let us calculate the npv.
00:50
Calculation of npv.
00:53
So, to calculate npv, we have to draft the columns.
00:56
The first column will be years.
00:58
The next is cash flow and pv factor.
01:03
So, pv factor for 10 % and the present value...