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Springfield Isotopes is considering a 10-year project with an initial fixed asset cost of $3,460,000 which will be depreciated straight-line to a zero book value
Springfield Isotopes is considering a 10-year project with an initial fixed asset cost of $3,460,000 which will be depreciated straight-line to a zero book value over 10 years. At the end of the project the equipment is scrapped. The project will increase pre-tax revenues to the firm by $725,000 a year. The tax rate is 35 percent. If the firm requires a 14 percent rate of return what is the NPV of this project? Question 6Answer a. The NPV is -$172,937.49 b. The NPV is -$87,820.48. c. The NPV is $251,860.34 d. The NPV is -$370,233.90 e. The NPV is $447,202.05
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