Javacity is considering new brewing equipment

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Reference no: EM131897163

JavaCity is considering new brewing equipment. The amount of initial investment will be $450 today and the equipment is expected to last for 10 years with no salvage value. The depreciable base is the entire amount of investment, and straight line depreciation will be used. Project inflows are expected to be $520 per year and project outflows are expected to be $315 per year, both starting in one year and continuing at the end of each year over the project life. JavaCity pays tax at the rate of 30%. What is the net present value of the project if the required rate of return is 8%. What is NPV?

Reference no: EM131897163

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