Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Suppose the appropriate discount rate is 13 percent. What is the NPV of the project? Year 0 Year 1 Year 2 Year 3 Year 4
Suppose the appropriate discount rate is 13 percent. What is the NPV of the project?
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | |
| Investment | -27000 | ||||
| Sales Revenue | 14000 | 14500 | 15000 | 12000 | |
| Operating Cost | -3000 | -3100 | -3200 | -2400 | |
| Depreciation | -6750 | -6750 | -6750 | -6750 | |
| Profit Before TAX | 4250 | 4650 | 5050 | 2850 | |
| tax (23%) | 977.5 | 1069.5 | 1161.5 | 655.5 | |
| Net Income | 3272.5 | 3580.5 | 3888.5 | 2194.5 | |
| Depreciation | 6750 | 6750 | 6750 | 6750 | |
| Net working capital | -330 | -380 | -430 | -330 | 1470 |
| Cashflow | -27330 | 9642.5 | 9900.5 | 10308.5 | 10414.5 |
Step by Step Solution
★★★★★
3.45 Rating (152 Votes )
There are 3 Steps involved in it
Step: 1
ANSWER To calculate the NPV of the project we need to discount each of the ...
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
Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
