Question: Temple Corp. is considering a new project whose data are shown below. The equipment that would be used has a 3- year tax life, would
Temple Corp. 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 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. Risk-adjusted WACC 10.0% Net investment cost (depreciable basis) $65,000 Straight-line depr. rate 33.3333% Sales revenues, each year $58,000 Annual operating costs (excl. depr.) $25,000 Tax rate 35.0% a) 57,202 b) 5,689 OC) $1,274 d) $5,401 el $6.265
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
