Chain of workout facilities

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Reference no: EM131056469

HealthWorks Inc, a chain of workout facilities, is looking at a new type of exercise equipment for all of its stores. The total amount of investment (an immediate outflow) will be $550 today and the equipment is expected to last for 5 years with no salvage value. In calculating project cash flows straight line depreciation will be used. Annual cash inflows connected with the project are expected to be $540 at the end of each year for 5 years and annual cash outflows connected with the project are expected to be $310 at the end of each year for 5 years. HealthWorks pays tax at the rate of 30%. What is the net present value of the project if the required rate of return is 8%.

Reference no: EM131056469

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