Question: A firm is considering a project which would require the purchase of $ 1 mm in equipment, which would be on a 1 0 yr

A firm is considering a project which would require the purchase of $1mm in equipment,
which would be on a 10 yr. straight line depreciation schedule. This would generate
$1.6mm in EBIT for each of the next 5 years. The firms marginal tax rate is 21%. The firm
would lose $90,000 in annual cash flows due to existing product sales being cannibalized
The firm would sell the equipment after 5 years for $400,000. What is the project NPV, if
the firms WACC is 10%?

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