Question
Your company is considering a new project which requires the investment of an equipment of $518,000, and it will be depreciated straightline to a zero
Your company is considering a new project which requires the investment of an equipment of $518,000, and it will be depreciated straightline to a zero over the life of the project. The equipment will be salvaged at the end of the project resulting in an aftertax salvage value of $32,000. The project lasts for 3 years and it will bring in an annual operating cash flows of $197,000. At the beginning of the project life, an increase of $25,000 in the net working capital is required, which will be fully recovered at the end of year 3. The discount rate is 17 percent and corporate tax rate is 34 percent
What is the year 0 cash flow?
what is the last year cash flow? (format and
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