Question
xyz is considering buying a new sterilization system. the new sterilization system would be purchased today for $88000. It would be depreciated straight-line to $0
xyz is considering buying a new sterilization system. the new sterilization system would be purchased today for $88000. It would be depreciated straight-line to $0 over 2 years. in 2 years, the steriliation system would be sold for an after tax cash flow of $7000. Without the sterilization system, costs are expected to be $110000 in one year and $150000 in two years. with the sterilazaion system, costs are expected to be $76000 and one year and $52000 in two years. if the tax rate is 50% and the cost of capital is 3.86% what is the net present value of the new sterilization system project?
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