Question
JavaCity is considering new brewing equipment. The amount of initial investment will be $ 550 today and the equipment is expected to last for 5
JavaCity is considering new brewing equipment. The amount of initial investment will be $550 today and the equipment is expected to last for 5 years with no salvage value. The depreciable base is the entire amount of investment, and straight-line depreciation will be used. Project inflows are expected to be $570 per year and project outflows are expected to be $330 per year, both starting in one year and continuing at the end of each year over the project life. JavaCity pays tax at a rate of 30%. What is the net present value of the project if the required rate of return is 9%? Project NPV $ Place your answer in dollars and cents. Work your analysis using at least 4 decimal places of accuracy.
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