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Tamarisk Company's tax rate is 40 percent and the appropriate discount rate is 11 percent. It is considering a project. Each asset class is large and continues after the project terminates. Tamarisk is not capital constrained. There is no change in net working capital at the beginning or at the termination of the project. The initial investment is $4,080; annual pre-tax operating cash flow is $2,190; salvage value is 0; the CCA rate is 30 percent; and the length of the project is three years. Calculate the NPV. (Round present value factor calculations to 6 decimal places, e.g. 1.251247 and the final answer to 2 decimal places, e.g. 15.75. Enter negative amounts using either a negative sign preceding the number e.g. -45.25 or parentheses e.g. (45.25).) Should Tamarisk take this project?

Financial Management, Finance

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