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You have decided to start a business. Your start up costs consists of the purchase of a capital asset for $100,000. This asset will

 

You have decided to start a business. Your start up costs consists of the purchase of a capital asset for $100,000. This asset will last for 5 years at which time is will be sold for 25% of the selling price. Your revenues will be $35,000 per year except the final year where they will increase to $42,000, expenses will be $10,000 per year. Your business will require an increase of working capital of $10,000 this will be recovered when the business is sold. Vishnu Balamurugan your CFO tells you that the CCA rate is 20%, the tax rate is 30% and the cost of capital is 9%. Find the NPV for this project.

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