Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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The machinery required for a three year project costs $20,000, belongs in a 15% CCA class, and will require a net working capital investment of $5,000 up-front (net working capital is recovered at the end of the project). The project generates pre-tax sales less cash costs of $15,500 in each of years 1 to 3. The fixed assets will be sold for a salvage value of $2,000 at the end of the project. If the firm has a tax rate of 35% and a required return of 10%, what is the project NPV? Multiple Choice O $12,021 $12,446 $10,432 to 200
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Transcribed Image Text:The machinery required for a three year project costs $20,000, belongs in a 15% CCA class, and will require a net working capital investment of $5,000 up-front (net working capital is recovered at the end of the project). The project generates pre-tax sales less cash costs of $15,500 in each of years 1 to 3. The fixed assets will be sold for a salvage value of $2,000 at the end of the project. If the firm has a tax rate of 35% and a required return of 10%, what is the project NPV? Multiple Choice O $12,021 $12,446 $10,432 to 200
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