Prof Kerr has developed new equipment care procedures that are able to increase the salvage value of the equipment by $20,000 (so it becomes $90,000 instead of $70,000). By how much will this increase the project\'s NPV?

A&Y Inc. considers a 7-year project that requires $500,000 of investment in new machinery and $40,000 in NWC (that will stay constant for the entire life of the project). At the end of the project the equipment will be sold for a salvage value of $70,000. The cost of capital is 10%, the equipment belongs to a CCA class with d=40%, and the corporate tax rate is 30%.