(Answered) Question - slowly company has obtained the following

Accounting

Question - Slowly Company has obtained the following information about a proposed project:

Future sales $200,000

Future expenses, excluding depreciation $140,000

Depreciation expense per year $35,000

Estimated salvage value in 5 years 0

Cost of equipment $180,000

Cost of capital 10%

Income tax rate 40%

Estimated useful life (in years) 5

Depreciation method Straight-line

Present value of ordinary annuity at 10% for 5 periods 3.7908

Present value of one at 10% for 5 periods 0.6209

Required:

A) What is the net after-tax income per year?

B) What is the annual after-tax cash flow from depreciation expense?

C) What is the NPV of the project?

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