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Felicitous Machines is evaluating a capital expenditure. Annual sales of $10,000 and costs of $7,800 are anticipated. The planning horizon is 6 years. The project
Felicitous Machines is evaluating a capital expenditure. Annual sales of $10,000 and costs of $7,800 are anticipated. The planning horizon is 6 years. The project will require $3,456 in net working capital. The initial capital expenditure is $4,000. The project will be depreciated using the MACRS-7 schedule. At the end of the project, there will be $1,606 pre-tax salvage value. The tax rate is 0.29. Venture capitalists backing this company expect a 0.11 rate of return. What is the NPV?
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