Today ABC Corp. starts a project that requires it to invest in new equipment of $1,038,000. Doing so will earn ABC pre-tax cash flows of $184,000 annually over 8 years. The equipment has a salvage value of $195,000. ABC's cost of capital is 8.30%, and its tax rate is 40%. The equipment falls into the 15% CCA class (half year rule applies). What is the NPV of the project?

Answer rating: 100% (QA)

To calculate the NPV Net Present Value of the project we need to discount the cash flows from the pr... View the full answer