Umbrella Corp., has a WACC of 10.2% and a tax rate of 26%. Project Alice requires an upfron cost of $150,000 for equipment at time (0). This equipment can be depreciated (straight-line... equal amounts) over the next three years. At the end of those three years, the equipment will have zero salvage value. Using this equipment will result in a $30,000 increase in working capital which can be recovered in year three after the machine goes offline. There project should generate $140,000 in gross revenue and incur operating cost of $60,000 every year for the next three years (not including depreciation expense). What is the net present value of Project Alice to the nearest dollar?
Already registered? Login
Not Account? Sign up
Enter your email address to reset your password
Back to Login? Click here