Question: (Net present value calculation) Carson Trucking is considering whether to expand its regional service center in Mohab, UT The expansion requires the expenditure of $9,000,000
(Net present value calculation) Carson Trucking is considering whether to expand its regional service center in Mohab, UT The expansion requires the expenditure of $9,000,000 on new service equipment and would generate annual net cash inflows from reduced costs of operations equal to $4,000,000 per year for each of the next 6 years. In year 6 the firm will also get back a cash flow equal to the salvage value of the equipment, which is valued at $0.9 million. Thus, in year 6 the investment cash inflow totals 54,900,000. Calculate the project's NPV using a discount rate of 6 percent If the discount rate is 6 percent, then the projects NPV is $(Round to the nearest dollar)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
