Question
A project requires an investment in fixed asset of $1,400,000.This cost will be depreciated straight-line to zero over the project's ten-year life.The project will save
A project requires an investment in fixed asset of $1,400,000.This cost will be depreciated straight-line to zero over the project's ten-year life.The project will save the firm $240, 000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $100,000.Tax rate is 20% and the discount rate is 8%.
What is the project's OCF?
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Derivatives Markets
Authors: Robert L. McDonald
2nd Edition
032128030X, 978-0321280305
