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Calculate the npv of the expected annual cash outflows

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Problem 1: Calculate the NPV of the following:

  1. $70,000 for equipment with useful life of 7 years and no salvage value.
  2. The expected annual cash revenue of the project will be $30,000. 
  3. The expected annual cash outflows (expenses/costs) are estimated at being $11,000, excluding depreciation. 
  4. Tax rate is 30% and you plan to depreciate the equipment on a straight-line basis for the life of the equipment.
  5. Discount rate is 6%. 
  6. After 5 years the equipment will stop working and there will be no salvage value.

Reference no: EM132646448

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