What is net present value of new purification system project

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Reference no: EM131549057

Oxygen Optimization is considering buying a new, high efficiency purification system. The new system would be purchased today for 14,000 dollars. It would be depreciated straight-line to 1, 200 dollars over 2 years. In 2 years, the system would be sold and the after-tax cash flow from capital spending in year 2 would be 2, 300 dollars. The system is expected to reduce costs by 3, 600 dollars in year 1 and by 11.400 dollars in year 2. If the tax rate is 50 percent and the cost of capital is 5.43 percent, what is the net present value of the new purification system project? Number

Reference no: EM131549057

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