Question: ABC Inc. is considering a new project whose data are shown below. The equipment would be used for three years with straight - line depreciation,

ABC Inc. is considering a new project whose data are shown below. The equipment would be used for three years with straight-line depreciation, and would have zero salvage value. No change in net operating working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's NPV? Hint: You need to first find CF0, CF1, CF2, and CF3. CF1-CF3 are the same number.
Keep the - sign if it's a negative NPV number. Round to the whole dollar.
Risk-adjusted WACC
10.0%
Net investment cost (depreciable basis)
$65,000
Straight-line depr. rate
33.3333%
Sales revenues, each year
$67,500
Annual operating costs (excl. depr.)
$25,000
Tax rate
35.0%

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