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The firm is evaluating a project that will add revenues of $325,000 annually for 5 years. The project has $225,000 of annual operating costs (including depreciation). The necessary equipment costs $350,000 and has a five-year life with straight line depreciation to $0. The new equipment requires an additional inventory investment of $20,000. Working capital investment reverses at end of project. Equipment is discarded at end of project resulting in an after tax cashflow of $10,000. Tax rate is 20%. What are the relevant cashflows necessary to calculate NPV?

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Financial Management, Finance

Category:- Financial Management
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