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-A machine costs $700. This investment is tax-deductible. - The machine will generate operating profits before depreciation of $400 per year for 3 years. The
-A machine costs $700. This investment is tax-deductible.
- The machine will generate operating profits before depreciation of $400 per year for 3 years. The first cash flow happens at the end of the first year after the machine is put in place.
- Depreciation is not tax-deductible
- The tax rate is 21%
-There is no salvage value at the end of the three years (the machine is worthless), and no required working capital investment.
Compute the NPV if the discount rate is 10%.
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