Should the project be implemented if thornley requires

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Question 1: Thornley Machines is considering a 3-year project with an initial cost of €618,000. The project will not directly produce any sales but will reduce operating costs by €265,000 a year. The equipment is depreciated straight-line to a zero book value over the life of the project. At the end of the project the equipment will be sold for an estimated €60,000. The tax rate is 34%. The project will require €23,000 in extra inventory for spare parts and accessories. Should this project be implemented if Thornley's requires a 9% rate of return? Why or why not?

Reference no: EM132595764

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