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use half year rule RJ17 is considering the purchase of a new computer system for $170,000. The asset has an economic life of 4 years,
use half year rule
RJ17 is considering the purchase of a new computer system for $170,000. The asset has an economic life of 4 years, a CCA rate of 45 %, and expected salvage value of $11,370. The project also requires an investment in net working capital of $12,000, which will be recovered at the end of the project. The project is expected to generate after-tax operating income of $60,000 per year. Assume the asset class remains open after the asset is sold. The firm's cost of capital is 14 % and marginal tax rate is 40 percent. What is the NPV of the project Step by Step Solution
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