The nihilist Caleb is setting up a recording studio which will have an annual revenue of $80,000 and annual cost of $40,000. The studio will require an initial investment of $20,000. What is the net present value after two years of recording? Caleb's discount rate is 10%, and income tax in Riga, where he lives, is 20%. In the investment year, depreciation on all items is 20%, then 50% the following year, and 30% in the next year, which is the end of the schedule.

Answer rating: 100% (QA)

1 Calculate taxable income for each year Year 1 Revenue80000 Cost40000 Depreciation20000 20 of 10000... View the full answer