Morgado inc has provided the following data to be used in, Ask an Expert

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Morgado Inc. has provided the following data to be used in evaluating a proposed investment project:

Initial investment	$300,000
Annual cash receipts	$95,000
Life of the project	5 year
Annual cash expenses	$60,000
Salvage value	$31,000

The company's tax rate is 31%. For tax purposes, the entire initial investment will be depreciated over 8 years without any reduction for salvage value. The company uses a discount rate of 11%.When computing the net present value of the project, what is the after-tax cash flow from the salvage value in the final year?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9966411

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