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Determine the NPV of the project

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Question - New equipment costs $675,000 and is expected to last for five years with an expected salvage value of $125,000. The initial net working capital investment is $82,000, of which 50% will be recovered at the end of the final year. The new equipment will save $260,000 annually before taxes. If the company's required rate of return is 12% and the PVCCATS value is $141,978, determine the NPV of the project. Assume a tax rate of 35%. The CCA rate is 30%.

Reference no: EM132617242

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