What is net salvage value of new equipment

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The companys bonds have a par value if 1000 and are currently priced ar 857.22 per 6% of bond, paying interest annually and maturing in 11 years. the companys stock has a beta of 1.20, the return on the market is 15% and the risk free rate is 2%. the company has no preffered stock outstanding, nor any foresseable intention of issuing preffered stock. its long term targeted debt/equity ratio is .60 the company marginal tax rate is 40%

Lani wants you to evaluate the purchase of a new equipment for 333,000 with shipping and installation addingg 15,000 to the capital cost. the new equipment will be depricated over 5 years on a straight line method it is expected that it can be sold for 30,000 at the end of 5 years.

What is the net salvage value of the new equipment?

Net Operating cash flow?

NPV?

Reference no: EM131935595

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