Question: Jones Car Wash is considering a new project whose data are shown below. The equipment that would be used has a 3 - year tax

Jones Car Wash is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated by the straight line method over the project's 3 year life, and would have zero salvage value. No new working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life. If the number of cars washed declined by 50% from the expected level, by how much would the project's NPV change? (Hint: Cash flows are constant in Years 1-3.)
WACC 10%
Net equipment cost (depreciable basis),$60,000
Annual depreciation ,$20,000
Number of cars washed ,2,800
Average price per car $25
Operating costs excl. depr'n $25,000
Taxrate ,35%
-$74,781
-$78,385
-$82,578
-$85,713
-$56,576
 Jones Car Wash is considering a new project whose data are

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