Perform comprehensive capital budgeting analysis to determin

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Question below should be done all manually with no excel formula functions. Thanks

1- Perform comprehensive capital budgeting analysis to determine if you should accept or reject Project XXXtreme which through enhanced genetic engineering of the firm's coffee providers increase in worker production thus lowering the costs per unit over the next four years with the following setup costs. (Show all the work!)

The system costs $175,000 to implement but provides a savings of $5,00 per unit each year for four years at which time the genetic algorithm self destructs and must be reproduced from scratch. Assume straight-line depreciation over the four year period for the system. However, additional overhead costs of $5,000 a year will be incurred.

The firms WACC is 15% (annually) < = note that everything is done annually.

The firms marginal tax rate is 30%

Use the following grid to set up your analysis. Be sure to correctly label everything. Note there may be more or less blanks than needed for the cash flow analysis depending on how you attack the problem. (Please copy and past the template to the answer area to save to save your time).


Description Year 1 Year 2 Year 3 Year 4

Production Levels 14,000 14,000 14,000 14,000

Reference no: EM13516278

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