Question
Your company is considering a new project which requires the investment of an equipment of $935,000, and it will be depreciated straight line to a
Your company is considering a new project which requires the investment of an equipment of $935,000, and it will be depreciated straight line to a zero over the life of the project. The equipment will be salvaged at the end of the project resulting in an after-tax salvage value of $64,000. The project lasts for 5 years and it will bring in an annual operating cash flows of $268,000. At the beginning of the project life, an increase of $34,000 in the net working capital is required, which will be fully recovered at the end of year 5. The discount rate is 14 percent and corporate tax rate is 40 percent.
What is the year 0 cash flow?
What is the last year cash flow? (format and keep whole number, no decimals, enter negative as minus sign, no space between minus sign and numeric numbers; no "$" or "," sign.)
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