What is the net present value of this project at discount

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Reference no: EM131991200

Mrs. Bean is considering adding a machine to her operation. The machine she wants would cost $35,000, would be depreciated on a straight line basis over the 4-year life, and would have zero salvage value. Bean estimates the income from the machine would be $33,000 a year with $10,000 of that amount being variable cost. The fixed cost would be $5,000. Bean feels that the machine would net her, after costs, an additional $10,000 in revenue from her operation. The project will require $1,000 of net working capital which is recoverable at the end of the project. What is the net present value of this project at a discount rate 12% and a tax rate of 34%?

Reference no: EM131991200

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