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A project requires new machinery costing $20 million today that will last for five years and will be depreciated straight-line to a value of zero
A project requires new machinery costing $20 million today that will last for five years and will be depreciated straight-line to a value of zero at the end of year five. The new machine is expected to produce project inflows of $30 million per year and project outflows of $15 million per year, both beginning one year from today for five consecutive years. Assuming a tax rate is 28% and a required rate of return of 10%, which comes closest to the projects NPV?
$10.02
$25.19
$11.92
$39.60
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