The companys tax rate is 31 for tax purposes the entire

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Morgado Inc. has provided the following data to be used in evaluating a proposed investment project:

Initial investment

$300,000

Annual cash receipts

$95,000

Life of the project

5 year

Annual cash expenses

$60,000

Salvage value

$31,000

The company's tax rate is 31%. For tax purposes, the entire initial investment will be depreciated over 8 years without any reduction for salvage value. The company uses a discount rate of 11%.When computing the net present value of the project, what is the after-tax cash flow from the salvage value in the final year?

Reference no: EM13588834

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