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Calculate the NPV of acquiring a widget-making machine (WMM) for which the following data has been assembled: WMM Cost: $30,000 Life: 5 years Revenue (p.a.)
Calculate the NPV of acquiring a widget-making machine (WMM) for which the following data has been assembled:
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| WMM |
| Cost: | $30,000 |
| Life: | 5 years |
| Revenue (p.a.) | $15,000 |
| Operating Expenses (p.a.) | $5,000 |
| Depreciation (p.a.) | $5,000 |
| Salvage Value: | $1,000 |
The firm requires a 12% p.a. return (after tax at the effective tax rate) on its investments and has an effective tax rate of 20%.
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