Illustrate what is the project npv

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Reference no: EM13130522

Temple Corp. is considering a new project whose data are shown below. The equipment that would be used has a three-year tax life, would be depreciated by the straight-line method over its three-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 three-year life. What is the project’s NPV?
Risk-adjusted WACC
Net investment cost (depreciable basis)
Straight-line deprec. rate
Sales revenues, each year
Operating costs (excl. deprec.), each year
Tax rate 10.0%
$65,000
33.333%
$65,500
$25,000
35.0%

a. $15,740
b. $16,569
c. $17,441
d. $18,359
e. $19,325

Evaluate your work/explain your answer so as to earn partial credit in the event you selected the incorrect answer.

Reference no: EM13130522

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