A project requires an initial investment of $10,000, straight-line depreciable to zero over 4 years. The discount
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A project requires an initial investment of $10,000, straight-line depreciable to zero over 4 years. The discount rate is 10%. Your tax bracket is 34% and you receive a tax credit for negative earnings in the year in which the loss occurs. Additional information for variables with forecast error are shown below.
Unit Sales $3,000
Price/unit $14
Variable cost/unit $9
Fixed costs $9,000
What is the NPV?
Please show work and equation used.
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