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What is the npv of investment

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Reference no: EM131318377

Terry Malloy is trying to decide whether his shipping company should invest in a new boat.  The new boat will cost $200,000 and it will be fully-depreciated on a straight-line basis over its 10-year useful life.  The new boat will have no salvage value.  The new boat is expected to increase EBITDA by $50,000 per year for 10 years.  What is the NPV of this investment if the corporate income tax rate is 50 percent and the cost of capital is 10 percent?

Reference no: EM131318377

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