Question: California Hideaways is considering a new project whose data are shown below. The equipment has a 4-year project life. This equipment falls into class 43

California Hideaways is considering a new project whose data are shown below. The equipment has a 4-year project life. This equipment falls into class 43 with a CCA rate of 30% and would have zero salvage value. No new working capital would be required. Revenues and cash operating costs are expected to be constant over the projects 4-year life. What is the projects NPV? (Hint: Cash flows are constant in Years 1 to 4.)

	WACC	10.0%
	Net investment cost	$65,000
	Sales revenues, each year	$60,000
	Cash operating costs	$25,000
	Tax rate	35.0%

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