Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Kinky Copies may buy a high - volume copier. The machine costs $ 5 0 , 0 0 0 and this cost can be fully

Kinky Copies may buy a high-volume copier. The machine costs $50,000 and this cost can be fully depreciated immediately. Kinky anticipates that the machine actually can be sold in 5 years for $16,000. The machine will save $24,000 a year in (after-tax) labor costs but will require an increase in working capital, mainly paper supplies, of $4,000. The firm's tax rate is 21%, and the discount rate is 15%.(Assume the net working capital will be recovered at the end of Year 5.)
What is the NPV of this project?
Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.
NPV
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

ABC Finance Coloring Book Familys First Financial Literacy Book

Authors: Jason Conger

1st Edition

1955961026, 978-1955961028

More Books

Students also viewed these Finance questions