Business Finance
Annual Savings

Question Description

Annual savings from Project X include a reduction of ten clerical employees with annual salaries of $15,000 each, $8,000 from reduced production delays, $12,000 from lost sales due to inventory stock-outs, and $3,000 in reduced utility costs. Project X costs $250,000 and will be depreciated over a five-year period using straight-line depreciation. Incremental expenses of the system include two new operators with annual salaries of $40,000 each and operating expenses of $12,000 per year. The firms’ tax rate is 34 percent. a. Find Project X’s initial cash outlay. b. Find the project’s operating cash flows over the five-year period. c. If the project’s required return is 12 percent, should it be implemented?


Final Answer

Please find the uploaded Excel File.projectsaving2.xlsx 

The project could be implemented.

madhavant (2757)
New York University

Anonymous
Return customer, been using sp for a good two years now.

Anonymous
Thanks as always for the good work!

Anonymous
Excellent job

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