XYZ Corporation is considering investing in a new manufacturing plant. The plant will require an initial investment
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XYZ Corporation is considering investing in a new manufacturing plant. The plant will require an initial investment of $1,000,000 and is expected to generate cash flows of $400,000 per year for the next 5 years. The plant will be sold at the end of the 5 years for an estimated salvage value of $400,000. The corporation's cost of capital is 8%. What is the net present value (NPV) of the project? Should XYZ Corporation invest in the new plant?
Related Book For
Valuation The Art and Science of Corporate Investment Decisions
ISBN: 978-0133479522
3rd edition
Authors: Sheridan Titman, John D. Martin
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