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What is the projects NPV

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Question - Your firm is considering investing in a supercomputer to implement a new revolutionary web service. The pre-tax cash flow (excluding CCA tax shields) is expected to be $18 million for each of the 10 years of the project's life. The equipment has an initial cost of $85 million and belongs in a 45% CCA class. Assume a 30% tax bracket, a discount rate of 12%, and a salvage value of $35 million. We assume that the firm will still have equipment in the same CCA class and that the half-year rule applies. What is the project's NPV?

Reference no: EM133068121

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