What is the NPV of the purchase

Reference no: EM132210815

Question - A new security system costs $240,000. This system will be depreciated at a diminishing value rate of 40%. The monitor will be worthless in 5 years but it will save theft of $70,000 per year before taxes. The required rate of return is 10% and the rate of tax is 30%. What is the NPV of the purchase if the tax is paid in the year the income is earned?

Reference no: EM132210815

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