Question: High Rise Co. has a project under consideration with the following estimated cash flows: An initial investment in equipment of $350,000. The equipment is on
High Rise Co. has a project under consideration with the following estimated cash flows: An initial investment in equipment of $350,000. The equipment is on a ten year straight line depreciation schedule. They forecast positive cash flows of $200,000 annually for six years. They will forego $15,000 in annual cash flows over this period. They can liquidate the equipment for $240,000 after six years. The firm's cost of capital is 12% and their tax rate is 25%. Calculate the NPV of this project
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