What is total present value of after-tax operating income

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Question - TAN Inc. is considering a project that requires the purchase of $121,000 of equipment, which belongs in a 30% CCA class. The equipment will have a salvage value of $28,500 at the end of the three-year project. This project will bring in after-tax operating income of $61,300 per year for the three years. No investments in net working capital will be required. The corporate tax rate is 35% and the required rate of return is 16%. What is the total present value of the after-tax operating income that the project will bring?

Reference no: EM133170134

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