Equipment that will be depreciated straight line to zero

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Reference no: EM131190759

Kelly Inc. is considering a project requiring a $300,000 investment in equipment that will be depreciated straight line to zero at the end of the 4-year project. At the end of the project, Kelly, Inc. expects to receive sales proceeds of $50,000 for the equipment. The firm will also need to invest $70,000 in working capital. The project will generate $100,000 in operating cash flow in each of the 4 years. Calculate the net present value given a 10% rate of return and a 34% tax rate.

Reference no: EM131190759

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