What is the present value of the benefits from year 4

Reference no: EM13295365

Matador Machining Works (MMW) is considering a project with a cost today of $100,000. The project consists of machinery that is classified as 3-year property for tax purposes. The project will reduce annual cash payments for maintenance by $25,000 per year over the next five years. At the end of five years the machinery can be sold for $10,000. MMW has a tax rate of 30% and a discount rate of 6%.

3. What is the present value of the benefits from year 1?
4. What is the present value of the benefits from year 2?
5. What is the present value of the benefits from year 3?
6. What is the present value of the benefits from year 4?
7. What is the present value of the benefits from year 5?
8. What is the NPV of the project?

Reference no: EM13295365

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