Your company is considering a project which will require the purchase of $635,000 in new equipment.The company

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Your company is considering a project which will require the purchase of $635,000 in new equipment.The company expects to sell the equipment at the end of the project for 25% of its original cost, but some assets will remain in the CCA class.Annual sales from this project are estimated at $224,000.Initial net working capital equal to 28.00% of sales will be required.All of the net working capital will be recovered at the end of the project. The firm requires a 8.00% return on similar investments.The tax rate is 35%, and the project life is 5 years.There are no other operating expenses.Assume the present value of the CCA tax shield is $102,000.What is the project's NPV?

Posted Date: May 18, 2024 03:16 PM

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Your company is considering a project which will require the purchase of $635,000 in new equipment.The company

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