Question: Temple Corp. is considering a new project whose data are shown below. The equipment that would be used hus a 3year tax life, would be
Temple Corp. is considering a new project whose data are shown below. The equipment that would be used hus a 3year tax life, would be depreciated by the straight-line method over its 3-year life, and would have a zero salvage value. No change in net operating working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's NPV? Do not round the intermediate calculations and round the final answer to the nearest whole number 10.0% $65,000 Risk-adjusted WACC Net investment cost (depreciable basis) Straight-line depr. rate Sales revenues, each year Annual operating costs (excl. dopr.) 33.3333% $71,500 $25,000 Tax rate 35.0%
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
