Prof Reynolds was able to use his industry connections to get a 3% discount on the equipment
Fantastic news! We've Found the answer you've been seeking!
Question:
Prof Reynolds was able to use his industry connections to get a 3% discount on the equipment (i.e., it can be purchased for $485,000 instead of $500,000). By how much will this increase the project\'s NPV?
A&Y Inc. considers a 7-year project that requires $500,000 of investment in new machinery and $40,000 in NWC (that will stay constant for the entire life of the project). At the end of the project the equipment will be sold for a salvage value of $70,000. The cost of capital is 10%, the equipment belongs to a CCA class with d=40%, and the corporate tax rate is 30%.
Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Posted Date: