Calculate the net present value of the project

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Point 1: Bridgton Ltd. Is considering to adopt the Artificial Intelligence (AI) System with an economic life of five years, which costs initial investment of $680,000. The Artificial Intelligence System will be fully depreciated over five years using the straight-line depreciation method. The market value of AI system will be $80,000 in five years. By adopting the Artificial Intelligence System will replace eight office employees whose combined annual salaries are $336,000. The AIS launch will also immediately lower the firm's required net working capital by $100,000. And this amount of net working capital will be recovered at the end of the year five. The corporate tax rate is 34 percent.

Question 1: Please calculate the net present value of the project (AIS) if the appropriate discount rate is 12 percent.

Reference no: EM132494016

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