Temple corp is considering a new project whose data are, Ask an Expert

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Temple Corp. is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated by the straight-line method over its 3-year life, and would have zero salvage value. No change in net operating working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life.

Risk-adjusted WACC 10.0%

Net Investment Cost (depreciable basis) $65,000

Straight-Line Depr. Rate 33.3333%

Sales Revenue, each year $71,000

Annual Operating Costs (excl. depr.) $25,000

Tax Rate 35.0%

What is the projects NPV? Do not round the intermediate calculations and round the final answer to the nearest whole number. Please show me how you got the answer!

Answers:

A. $25,393

B. $23,136

C. $30,190

D. $28,215

E. $25,958

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92881000

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