Reference no: EM132941308

Questions -

Q1. A project has an initial outlay of $100,000. The project will generate annual cash flows of $18,000 over the 8-year life of the project and terminal cash flows of $7,500 in the last year of the project. If the required rate of return on the project is 10%, what is the net present value (NPV) of the project?

Q2. A company purchased an equipment worth $250,000. It will be depreciated using the straight-line depreciation over 8 years. Assume a tax rate of 20%.

-What is the book value of this asset at the end of years 1-8?

-What is the depreciation expense in each of the years 1-8?

-If the equipment can be sold for $5,000 at then end of Year 5, what is the after-tax salvage value?

-If the equipment can be sold for $80,000 at then end of Year 5, what is the after-tax salvage value? Also, please upload your excel files showing your work.