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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 $81,000 and then requires an initial investment in working capital of $19,000(at t =0). You expect the project to produce sales revenue of $100,000 per year for three years. You estimate manufacturing costs at 60% of revenues. (Assume all revenues and costs occur at year-end, i.e., t =1, t =2, and t =3.) The equipment depreciates using straight-line depreciation over three years. At the end of the project, the firm can sell the equipment for $20,000 and recover the investment in net working capital. The corporate tax rate is 30% and the cost of capital is 15%. Calculate the NPV of the project:
$3,840.
$4,122.46.
$-2,735.
$7,342.

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