Compute the pi statistic for project x

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1. Suppose you sell a fixed asset for $127,000 when it's book value is $159,000. If your company's marginal tax rate is 33%, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)?

2. Compute the PI statistic for Project X and note whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 6 percent.

Time 0 1 2 3 4 5

Cash flow -84 -84 0 119 94 69

Reference no: EM132376692

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