Conway marginal tax rate

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Reference no: EM131402396

Conway Inc. is considering the purchase of new machine for $100,000 that will increase sales by $55,000

Annually. But the cost (Not including depreciation) will increase only by $5000 annually. Conway will depreciate the machine t zero dollars salvage value according to the following schedule: 40% first year, 40% second year, and 20% third year, and expected no resale value for the machine at the end of its 3 year operating life. Conway's marginal tax rate is 20%, and its uses a 15% cost of capital to evaluate projects of this type.

Find the NPV of the project

Reference no: EM131402396

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