Given the following information and assuming straight-line depreciation to zero,
ID: 2663906 • Letter: G
Question
Given the following information and assuming straight-line depreciation to zero, what is the NPV for this project?Initial investment in fixed assets = $800,000; net working capital = $200,000; life = 4 years; cost savings = $400,000 per year; tax rate = 35%; discount rate = 12%. The fixed assets will be sold for $100,000 at the end of year 4.
- $95,101
- $105,967
- $133,560
- $170,738
- $204,289
Initial investment in fixed assets = $800,000; net working capital = $200,000; life = 4 years; cost savings = $400,000 per year; tax rate = 35%; discount rate = 12%. The fixed assets will be sold for $100,000 at the end of year 4.
Explanation / Answer
4. $170,738
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