Snowy Mountain Timber Ltd is considering purchasing a new woodsaw that costs $50,000. The saw will generate revenues of $100,000per year for five years. The cost of materials and labour needed togenerate these revenues will total $60,000 per year, and other cashexpenses will be $10,000 per year. The machine is expected to sellfor $4,000 at the end of its five-year life and will be depreciatedon a straight-line basis over five years to zero. Snowy Mountain’stax rate is 34 percent, and its opportunity cost of capital is13.30 percent.
The project's NPV is?
The project should be accepted/rejected
