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Set-up: You can purchase a new technology for $1m The new technology would create a revenue of $0.5m and costs of $0.4m. The tax rate
Set-up: You can purchase a new technology for $1m The new technology would create a revenue of $0.5m and costs of $0.4m. The tax rate is 0.4 and depreciation is straight-line over 2 years
Compute the net present value if 1. inflation is 0%. 2. inflation is 10%. 3. inflation is 0% and there is a continuation value. 4. inflation is 0% and you can sell the technology in year 3 for $0.8m. 5. you only consider the salvage value with 2% in ation.
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