Question
If we have a salvage value of a machine and also the recovery of the initial working capital investment. For example. Salvage value is 5000
If we have a salvage value of a machine and also the recovery of the initial working capital investment. For example. Salvage value is 5000 after 4 years, working capital investment is 100000 and it recovers in four years. Initially, Equipment cost is 100000, discount rate is 10% and tax rate is 30%. Cash flows four fours years are same at 100000. While calculating Net present Value,
what will be the cash flow for year 4?
Do we need to add salvage value and working capital investment recovery to calculate cash flow of year 4?
Is there any relation of tax rate?
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