Compute and perform the final npv calculations

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Consider this project:

  • The cost of the equipment will be $70,000 and this cost is incurred prior to any cash is received by the project.
  • The expected annual cash revenue of the project will be $30,000.
  • The expected annual cash outflows (expenses/costs) are estimated at being $11,000, excluding depreciation.
  • Your tax rate is 30% and you plan to depreciate the equipment on a straight-line basis for the life of the equipment. The discount rate you are assuming is 6%.
  • After 5 years the equipment will stop working and there will be no salvage value.

Requirements of the paper:

Problem 1: Perform the final NPV calculations and explain how you calculated the computations Present your calculated answers in schedule format (a table) along with narrative.

Reference no: EM132718676

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