Question
Consider a $10,000 machine that will reduce pretax operating costs by $3,000 per year Over a 5-year period. Assume no changes in net working capital
Consider a $10,000 machine that will reduce pretax operating costs by $3,000 per year Over a 5-year period. Assume no changes in net working capital and a salvage value of zero. Further assume straight line depreciation to zero, a marginal tax rate of 34%, and a required return of 10%. The project NPV is?
A.$83
B.$449
C.$689
D.$827
E.$1,235
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Contemporary Financial Management
Authors: R. Charles Moyer, James R. McGuigan, Ramesh P. Rao
14th edition
1337090581, 978-1337090582
