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Temple Corp is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be
Temple Corp is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated by the straight-line method over its 3-year life, and would have a zero salvage life. No change in net operating working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's NPV?
Risk-adjusted WACC | 10.0% |
Net investment cost (depreciable basis) | $65,000 |
Straight-line depr. rate | 33.333% |
Sales revenues, each year | $71,000 |
Annual operating costs (excl. depr) | $25,000 |
Tax rate | 35.0% |
Group of answer choices
$28,215
$25,393
$25,958
$23,136
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