C4 (5) Assume a potential capital investment has an initial cost of $35,000.00, an expected...
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C4 (5) Assume a potential capital investment has an initial cost of $35,000.00, an expected life of 5 years, and an expected salvage value of $10,000.00. Assume that in each of years 1 through 5 the project will generate a NET positive operating cash flow of $7,500.00. Assume a before tax discount rate (WCC) of 8%. Assume the relevant marginal tax rate for your business is 28%, and assume the business elects to use simple straight-line (slow) depreciation for tax purposes. Set up a spreadsheet table and calculate both the "before tax" NPV of this proposed investment, and the "after tax" NPV of this proposed investment. Be sure to use the appropriate "after tax" discount rate in your after tax analysis
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