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How to compute using a financial calculator A project requires an initial investment in equipment of $ 8 1 , 0 0 0 and then
How to compute using a financial calculator
A project requires an initial investment in equipment of $ and then requires an initial investment in working capital of $at t You expect the project to produce sales revenue of $ per year for three years. You estimate manufacturing costs at of revenues. Assume all revenues and costs occur at yearend, ie t t and t The equipment depreciates using straightline depreciation over three years. At the end of the project, the firm can sell the equipment for $ and recover the investment in net working capital. The corporate tax rate is and the cost of capital is Calculate the NPV of the project:
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