Transcribed Image Text
A company is considering a 3-year project that requires aninitial installed equipment cost of $10,000. The project engineerhas estimated that the operating cash flows will be $5,000 in year1, $6,000 in year 2, and $9,000 in year 3. The new machine willalso require a parts inventory of $1,000 at the beginning of theproject (assume this inventory can be sold for cost at the end ofthe project). It is also estimated that the equipment can be soldas salvage for an after tax salvage cash flow of $5,000 at the endof the project. If the tax rate is 33% and the required rate ofreturn is 12%, what is the net present value (NPV) of this project?(Answer to the nearest dollar.)
Other questions asked by students
Finance
Biology
Accounting
Accounting