Discuss about the installation costs

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Question: A project has an initial requirement of $195,776 for new equipment and $8,290 for net working capital. The installation costs to get the new equipment in working condition are 7,674. The fixed assets will be depreciated to a zero book value over the 5-year life of the project and have an estimated salvage value of $132,604. All of the net working capital will be recouped at the end of the project. The annual operating cash flow is $74,941 and the cost of capital is 7% What is the project's NPV if the tax rate is 36%?

Reference no: EM132059573

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