Question: Green Cave Industrial is evaluating a 2 - year project that would involve buying equipment for $ 8 0 0 , 0 0 0 that

GreenCave Industrial is evaluating a 2-year project that would involve buying equipment for $800,000that would be depreciated using accelerated depreciation rates in years 1,2,3, and 4 of 45%,25%,20%, and 10%, respectively. In years 1 and 2, relevant revenue for the project is expected to be $562,000per year and relevant costs for the project are expected to be $158,000per year. Capital spending would be $0 in year 1 and the equipment would be sold for $284,000in 2 years. The tax rate is 20percent and the cost of capital for the project is 9.21percent. What is the net present value of the project?

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