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Cookie Cutter Corp. is considering a new project whose data are shown below. The equipment that would be used has a 5-year tax life, would
Cookie Cutter Corp. is considering a new project whose data are shown below. The equipment that would be used has a 5-year tax life, would be depreciated by the straight-line method over its 5- year life, and would have a zero salvage value. No change in net operating working capital would be required. Revenues and other operating costs are expected to be constant over the project's 5- year life. What is the project's NPV? Do not round the intermediate calculations and round the final answer to the second decimal place. Risk-adjusted WACC = 8.6% Net investment cost (depreciable basis) = $140,000 Straight-line depreciation rate = 20.00% per year Cash Sales revenues, each year = $71,000 Annual cash operating costs (excluding depreciation) = $25,000 Tax rate = 22.0%
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