Question
) Carson Trucking is considering whether to expand its regional service center in Mohab, UT. The expansion requires the expenditure of $10,500,000 on new service
)Carson Trucking is considering whether to expand its regional service center in Mohab, UT. The expansion requires the expenditure of
$10,500,000
on new service equipment and would generate annual net cash inflows from reduced costs of operations equal to
$4,000,000
per year for each of the next
9
years. In year
9
the firm will also get back a cash flow equal to the salvage value of the equipment, which is valued at
$1
million. Thus, in year
9
the investment cash inflow totals
$5,000,000.
Calculate the project's NPV using a discount rate of
6
percent.
Question content area bottom
Part 1
If the discount rate is
6
percent, then the project's NPV is
$enter your response here.
(Round to the nearest dollar.)
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