How you calculated the computations and why

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Reference no: EM133716424

Question: The cost of the equipment will be $70,000 and this cost is incurred prior to any cash is received by the project. The expected annual cash revenue of the project will be $30,000. The expected annual cash outflows (expenses/costs) are estimated at being $11,000, excluding depreciation. Your tax rate is 30% and you plan to depreciate the equipment on a straight-line basis for the life of the equipment. The discount rate you are assuming is 6%. After 5 years the equipment will stop working and there will be no salvage value. Requirements of the paper: Perform the final NPV calculations and provide a narrative on how you calculated the computations and why (justification of answer). Present your calculated answers in schedule format (a table) along with your narrative. Microsoft Excel is also recommended for calculating and creating a table (your schedule). Then provide a summary conclusion on whether you should continue to pursue this business opportunity. Research, using at least one other sources other than the textbook materials that support your calculations and conclusions.

Reference no: EM133716424

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