ABC is thinking about buying a kiln that costs $27,000. ABC will use the kiln for five
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ABC is thinking about buying a kiln that costs $27,000. ABC will use the kiln for five years, and expects to be able to sell it as scrap at the end of the five year period for $2,000. The kiln won't add any revenues, but it is more efficient than the existing kiln, so it is expected that it would save the firm $15,651 the first year, $9,484 the second year, $8,578 the third year, $4,112 the fourth year, and $3,043 the fifth and final year. The kiln would be depreciated using standard 3-year MACRS percentages (33%, 45%, 15%, and 7%). ABC's cost of capital is 12 percent. Given that information, what is the NPV of this potential project?
Related Book For
College Mathematics for Business Economics Life Sciences and Social Sciences
ISBN: 978-0321614001
12th edition
Authors: Raymond A. Barnett, Michael R. Ziegler, Karl E. Byleen
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