Question
30. The Company is considering a new project of 2 years. The initial investment on the the machine costs $270,135, and will be depreciated on
30. The Company is considering a new project of 2 years. The initial investment on the the machine costs $270,135, and will be depreciated on a straight-line basis to zero over the project life. The machine will become worthless in the end. The project will brings in annual operating cash flow of $280,140 .It also requires an additional investment in net working capital of $6,000 initially, which will be fully recovered at the end of the project. The tax rate is 33%. The discount rate is 13% . Please compute the NPV of this project. (Round answers to two decimals, such as 1234.78)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started