Question:Cromwell Mediwaste is considering purchasing a $270,000
scrubber for the smokestack on its incinerator in order...
Question
Cromwell Mediwaste is considering purchasing a $270,000
scrubber for the smokestack on its incinerator in order...
Cromwell Mediwaste is considering purchasing a $270,000
scrubber for the smokestack on its incinerator in order to reduce
the number of environmental fines levied against them. Cromwell
believes the scrubber would become ineffective and worthless after
three years. The equipment will be depreciated using the three-year
MACRS schedule. The 3-year project will reduce costs by $125,000
per year and net working capital will be reduced by $10,000.
Cromwell is in the 20 percent tax bracket and requires a 20 percent
return on projects. What is the project NPV? (Round to the neatest
whole number)