A new electronic process monitor costs $990,000. This cost could be depreciated at 30% per year (Class 10). The monitor
Posted: Tue Nov 16, 2021 8:34 am
A new electronic process monitor costs $990,000. This cost could
be depreciated at 30% per year (Class 10). The monitor would
actually be worth $100,000 in five years. The new monitor would
save $460,000 per year before taxes and operating costs. Suppose
the new monitor requires us to increase net working capital by
$47,200 when we buy it. If we require a 15% return, what is the NPV
of the purchase? Assume a tax rate of 40%. (Do not
round intermediate calculations. Round the final answer to 2
decimal places. Omit $ sign in your response.)
NPV
$
be depreciated at 30% per year (Class 10). The monitor would
actually be worth $100,000 in five years. The new monitor would
save $460,000 per year before taxes and operating costs. Suppose
the new monitor requires us to increase net working capital by
$47,200 when we buy it. If we require a 15% return, what is the NPV
of the purchase? Assume a tax rate of 40%. (Do not
round intermediate calculations. Round the final answer to 2
decimal places. Omit $ sign in your response.)
NPV
$