Question
Kinky Copies may buy a high-volume copier. The machine costs $80,000 and this cost can be fully depreciated immediately. Kinky anticipates that the machine actually
Kinky Copies may buy a high-volume copier. The machine costs $80,000 and this cost can be fully depreciated immediately. Kinky anticipates that the machine actually can be sold in 5 years for $23,000. The machine will save $21,000 a year in labor costs but will require an increase in working capital, mainly paper supplies, of $7,000. The firm's marginal tax rate is 21%, and the discount rate is 10%. (Assume the net working capital will be recovered at the end of Year 5.)
What is the NPV of this project?(Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)
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