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5. An investment has the following cash flows before-tax, at a 10% discount rate, should the investment be undertaken? How about if we include tax-savings
5. An investment has the following cash flows before-tax, at a 10% discount rate, should the investment be undertaken? How about if we include tax-savings from depreciation (use straight-line depreciation for 3 years)? Assume a tax rate of 30%.
year | cash flow |
0 | -12500 |
1 | 8000 |
2 | 6000 |
3 | 6000 |
4 | 1000 |
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