What is the year-0 net cash flow

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Reference no: EM132970589

Question: Allen Air Lines must liquidate some equipment that is being replaced.

The equipment originally cost $11.2 million, of which 80% has been depreciated. The used equipment can be sold today for $5.6 million, and its tax rate is 25%. What is the equipment's after-tax net salvage value? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar.

What is the Year-0 net cash flow? $

What are the net operating cash flows in Years 1, 2, and 3? $(3 boxes)

What is the additional Year-3 cash flow (i.e, the after-tax salvage and the return of working capital)? $

If the project's cost of capital is 15%, what is the NPV of the project?

Reference no: EM132970589

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