Question
(Net present value calculation)Carson Trucking is considering whether to expand its regional service center in Mohab, UT. The expansion requires the expenditure of $9,000,000 on
(Net present value calculation)Carson Trucking is considering whether to expand its regional service center in Mohab, UT. The expansion requires the expenditure of $9,000,000 on new service equipment and would generate annual net cash inflows from reduced costs of operations equal to $4,000,000 per year for each of the next 9 years. In year 9 the firm will also get back a cash flow equal to the salvage value of the equipment, which is valued at $0.8 million. Thus, in year 9 the investment cash inflow totals $4,800,000 . Calculate the project's NPV using a discount rate of 10 percent. If the discount rate is 10 percent, then the project's NPV is? (Round to the nearest dollar.)
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