Question
Crazy dog Computers, Inc. is considering investing in a machine to produce computer keyboards. The price of the machine is $400,000 and its useful life
Crazy dog Computers, Inc. is considering investing in a
machine to produce computer keyboards. The price of the machine is $400,000 and its
useful life is five years, after which it will have no resale value. The machine is
depreciated with by straight line depreciation over 5 years. The machine will produce
10,000 keyboards each year. The sale price of each keyboard will be $40 in the first year
and will increase by 5% per year. The production cost per keyboard will be $20 in the
first year and will increase by 10% per year. No working capital will be needed. The
corporate tax rate for the company is 34%. The appropriate nominal discount rate is 15%.
What is the NPV of the investment?
Please answer question in a table form
0 1 N 3 4 5
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