Depreciated straight-line method

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Reference no: EM13953758

DiCapri Company 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 straight-line method over its 3-year life, and would have a zero salvage value. No new working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's NPV

Risk adjusted Wacc 14%

Net investment cost (deprec. basis) $65,000

straight-line deprec. rate 33.3333%

sales revenue, each year $65,500

operating costs(excel. deprec.), each year $25,000

tax rate 35%

Reference no: EM13953758

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