A wind turbine will cost $2 million to build and install. The PVCCATS works out to 25% of the investment. The turbine will operate for 20 years and produce sales of $300,000 at the end of each year. The operating margin (EBIT margin) is 80% and the tax rate is 25 %. There are no changes to net working capital and no salvage. The discount rate is 8%. What is the present value of the operating cash flow annuity? (closest answer) $1.6 million $1.8 million $2.0 million 2.2million

A wind turbine will cost $2 million to build and install. The PVCCATS works out to 25% of the investment. The turbine will operate for 20 years and produce sales of $300,000 at the end of each year. The operating margin (EBIT margin) is 80% and the tax rate is 25 %. There are no changes to net working capital and no salvage. The discount rate is 8%. What is the present value of the operating cash flow annuity? (closest answer) $1.6 million $1.8 million $2.0 million 2.2million

Name: A wind turbine will cost $2 million to build and install. The PVCCATS
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Description: A wind turbine will cost $2 million to build and install. The PVCCATS works out to 25% of the investment. The turbine will operate for 20 years and produce sales of $300,000 at the end of each year.The operating margin (EBIT margin) is 80% and the t

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 10PB: Bouvier Restaurant is considering an investment in a grill that costs $140,000, and will produce...

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