Question
A company is considering a 2-year project with the following cash flows: Initial investment: $800 Cash inflow, year 1: $550 Cash inflow, year 2: $810
A company is considering a 2-year project with the following cash flows:
Initial investment: $800
Cash inflow, year 1: $550
Cash inflow, year 2: $810
Salvage value, year 2: $250
The company uses straight-line depreciation to depreciate the initial investment cost. In other words, annual depreciation is (initial investment - salvage value)/2. The company's discount rate is 10%. What is the Net Present Value of this project?
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Auditing Assurance And Risk
Authors: W. Robert Knechel, Steve Salterio, Brian Ballou
3rd Edition
0324313187, 9780324313185
