GREEN Plc is considering purchasing a machinery priced at £500,000 today. The machinery will have a scrap value at the end of its three-year life equalto write-down value. The write down allowance (WDA) for this machinery is 18% each year. The corporate tax rate in the UK is 19%.The required rate of return for Green is 15%. The estimated operating cashflows from the new machinery are expected as below.

TIME                             Year 1               Year 2               Year 3 

 CF Before Tax          200,000          400,000           100,000

Calculate the NPV of this project. Full workout is expected.  

Answer rating: 100% (QA)

Calculate the Net Present Value NPV of the project Where CF1 CF2 CF3 are the expected cash flows in ... View the full answer