Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The investment cost for a project is now $60,000. The project will last 10 years. By the end of the year, the machine could be
The investment cost for a project is now $60,000. The project will last 10 years. By the end of the year, the machine could be sold at $6000. There is no additional working capital requirement. The depreciation method straight line depreciation over 10 years with the base of $55,000 as the firm believed the machine has value in the end. Starting from the end of the first year, it generates revenues of $25,000 every year, cash expenses of $10000. The firm's tax bracket is Discount rate is 10%. What is the operating cash flow per year from year 1 to year 10? What is the investment cash flow at the end of year 10? Based on 18, What's the NPV of the project based on the discounted cash flow analysis
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started