Reference no: EM132516854
Question - UCSI Bakery Ltd considering purchasing an industrial size oven which are used as part of a production line that bakes bread. The following data on a proposed investment project have been provided [ignore income taxes in this problem]:
Cost of equipment RM 70,000
Annual depreciation RM 26,250
Working capital required RM 50,000
Salvage value of equipment RM 0
Annual cash inflows from the project RM 40,000
Required rate of return 20 %
Life of the project 8 years
Working capital is recoverable at the end of this project.
Required - Calculate the net present value (NPV) of the project.