Question: Flonida Car Wash is considering a new project whose data are shown below. The equipment to be used has a 3-year tax life. Under the
Flonida Car Wash is considering a new project whose data are shown below. The equipment to be used has a 3-year tax life. Under the new tax law, the equipment in eligible for 100% bonus depreciation, so it will be fully deprecinted at t=0. At the end of the project's 3 year life, it would have zero salvage value. No changn in net opernting working capital (NOWC) would be required for the project. Revenues and openting costs will be constant over the project'n life, and this is just one of the firm's many projects, so any losses on it can be used to offset profits in other units. If the number of can washed declined by 40x from the expected level, by how much would the project's NPV change? (Hint: Note that cash flows are constant at the Year 1 level, whatever that level is.) Do not round the intermicdiate calculations and round the final answer to the nearest whole number
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