Question
A four-year project requires an initial investment of $165,000 in fixed assets plus $25,000 in net working capital. The project has after-tax costs of $14,501.
A four-year project requires an initial investment of $165,000 in fixed assets plus $25,000 in net working capital. The project has after-tax costs of $14,501. The assets belong in a 20% CCA class and will have no salvage value. What is the project's equivalent annual cost if the required return is 14% and the firm's tax rate is 34%?
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Cornerstones of Financial and Managerial Accounting
Authors: Rich Jones, Mowen, Hansen, Heitger
1st Edition
9780538751292, 324787359, 538751290, 978-0324787351
