Q.) Project Evaluation: you are considering a new pizza oven with an installed cost of $460. This cost will be depreciat
Posted: Mon Mar 21, 2022 4:32 pm
Q.) Project Evaluation: you are considering a new pizza
oven with an installed cost of
$460. This cost will be depreciated straight-line to zero over the
project’s five-year
life, at the end of which the oven can be scrapped for $55. The
oven will save you
$155 per year in pretax operating costs, and the system requires an
initial
investment in net working capital of $29. If the tax rate is 21
percent and the
discount rate is 10 percent, what is the NPV of this project?
(Please provide the excel formulas as well)
oven with an installed cost of
$460. This cost will be depreciated straight-line to zero over the
project’s five-year
life, at the end of which the oven can be scrapped for $55. The
oven will save you
$155 per year in pretax operating costs, and the system requires an
initial
investment in net working capital of $29. If the tax rate is 21
percent and the
discount rate is 10 percent, what is the NPV of this project?
(Please provide the excel formulas as well)