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Orange Logistic is thinking of opening a new warehouse. The company owns the building that would be used, and it could see it for $100,000 after taxes if it decides not to open the new warehouse. The equipment for the project would be depreciated by the straight-line method over the projects 3 year life, after which it would be worth nothing and thus it would have 0 salvage value. No new working capital would be required, and revenues and other operating costs would be constant over the projects 3 year life. What is the project NPV? cash flows are constant in years 1-3

WACC = 10%

Opportunity cost = 100,000

Net equipment cost (depreciable basis) 65,000

Straightened deprecate = 33.33%

Sales rev = 123,000 yearly

Operating costs 25000

Tax rate 35%

 

Just need to see how to calculate in excel.

Financial Management, Finance

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