Marine Technologies has identified a project that will lower annual operating costs by $10,000 per year for
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Marine Technologies has identified a project that will lower annual operating costs by $10,000 per year for 5 years. The equipment costs $30,000, installation and training is $5,000, and there is an initial investment in net operating working capital of $6,000. There is no expected salvage value in 5 years. Marine Technologies operates at break-even so it pays no taxes. If the company's cost of capital is 10%, what is the project's NPV?
Salvage ValueSalvage 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... Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...
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Equipment 30000 Installation and training 5000 NWC inv...View the full answer
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Related Book For 
Financial Management Theory And Practice
ISBN: 978-0176583057
3rd Canadian Edition
Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason
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