Kramer Corporation is considering two investment projects, each of which would require $50,000. Cost and cash flow

Question:

Kramer is considering two investment projects, each of which would require $50,000. Cost and cash flow data concerning the two projects are given below:

Kramer Corporation is considering two investment projects, each

The high-speed photocopier would have a salvage value of $5,000 in eight years. For tax purposes, the company computes depreciation deductions assuming zero salvage value and uses straight-line depreciation. The photocopier would be depreciated over eight years. At the end of eight years, the investment in working capital would be released for use elsewhere. The company requires an after-tax return of 10% on all investments. The tax rate is 30%.
Required:
Compute the net present value of each investment project. (Round to the nearest wholedollar.)

Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at... Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...