Question

A firm is considering a replacement project which requires the initial outlay of $300,000 which includes both an after-tax salvage from the old asset of $12,000 and an additional working capital investment of $8,000. The 12-year project is expected to generate annual incremental cash flows of $54,000 and have an expected terminal value at the end of the project of $20,000. The cost of capital is 15 percent, and its marginal tax rate is 40 percent. Calculate the net present value of this project.

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16 A firm is considering a replacement project which requires
the initial outlay of $300,000 w-hich includes both an after-tax
salvage from the old asset of $12,000 and an additional working
capital investment of $8,000. The 12-year project is expected to
generate annual incremental cash flows of $54,000 and have an
expected terminal value at the end of the project of $20,000. The
cost of capital is 15 percent, and its marginal tax rate is 40
percent. Calculate the net...

A company s considering a project which requires the initial
outlay of $300,000 which includes both an after-tax salvage from
the old asset of $12,000 and an additional working capital
investment of $8,000. The 12-year project is expected to generate
annual incremental cash flows of $54,000 and have an expected
terminal value at the end of the project of $20,000. The cost of
capital is 15 percent, and the company's marginal tax rate is 40
percent. Calculate the net present...

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$400,000, which includes an increase in net working capital of
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