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need 4 decimal places Problem 6-26 Project Analysis and Inflation Amazing Manufacturing, Inc, has been considering the purchase of a new manufacturing facility for $590,000.
need 4 decimal places
Problem 6-26 Project Analysis and Inflation Amazing Manufacturing, Inc, has been considering the purchase of a new manufacturing facility for $590,000. The facility is to be fully depreciated on a straightline basis over seven years. It is expected to have no resale value at that time. Operating revenues from the facility are expected to be $435,000, in nominal terms, at the end of the first year. The revenues are expected to increase at the inflation rate of 4 percent. Production costs at the end of the first year will be $280,000, in nominal terms, and they are expected to increase at 5 percent per year. The real discount rate is 7 percent. The corporate tax rate is 25 percent. Calculate the NPV of the project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Step by Step Solution
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