Machines would enhance revenues by 180000 per year and, Ask an Expert

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1) Heron Corporation is planning to add up manufacturing capacity by installing new high-tech machines. Machines would enhance revenues by $180,000 per year and enhance costs by $50,000 per year. New machines cost= $560,000 and would be depreciated over five years by using simplified straight line. Investment in net working capital of= $30,000 would be needed at the time of installation. Firm is planning to keep machines for seven years and then sell them for $80,000. The firm has a needed rate of return on investment projects of 13% and a marginal tax rate of 34%. Determine the net present value of this project?

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Category:- Basic Finance
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