Requires purchases of capital assets

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You are the Project Manager for a project that requires purchases of capital assets costing $1,050,000. The project will incur $21,000 of additional upfront costs for equipment installation. You estimate the project will generate $318,500 in annual operating cash flows for each of the next 5 years. The project will be complete at the end of 5 years and the assets will have a salvage value of $15,000. The assets are classified as 5-year assets for MACRS purposes. The tax rate is 35% and the asset cost of capital is 15%. a. create a table showing the cash flows for each year of the project b. what is the next present value of the project? c. as Project Manager, based on the project's net present value, should you accept the project? Why? *Work must be shown using Excel formula(s) & function(s).

Reference no: EM131623686

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