Find after-tax total cash flow for the second year

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XYZ Inc. considers an investment project that requires $250,000 in new equipment and requires a $30,000 investment in NWC that will be released at the end of the project. All investments are made on January 1 of the first year. The projects will lead to an increase in operating pre-tax net revenue of $100,000 per year for 3 years (end of each year). At the end of the project, the equipment will be sold for a salvage value of $72,000. The equipment belongs to the CCA class with d=40%, the corporate income tax rate is 30% and the cost of capital is 11%.

Find after-tax total cash flow for the second year.

Find NPV of the project.

Reference no: EM132497988

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