A project costs $800,000 plus $200,000 in shipping and installation. For the next five years the project is expected to generate $500,000 in sales & 200,00 in costs. The project is being depreciated straight line over five years ($200,000 per year). The firm's tax rate is 40% and K = 10%. 

Find the NPV. 

Should the project be undertaken?

Answer rating: 100% (QA)

To find the Net Present Value NPV of the project we need to calculate the cash flows for each year a... View the full answer