What is the yearly cash flow from the project

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Reference no: EM131928851

Daily Enterprises is purchasing a $10.32 million machine. It will cost $61,654.00 to transport and install the machine. The machine has a depreciable life of five years using the straight-line depreciation and will have no salvage value. The machine will generate incremental revenues of $4.37 million per year along with incremental costs of $1.24 million per year. Daily’s marginal tax rate is 36.00%. The cost of capital for the firm is 12.00%. (answer in dollars..so convert millions to dollars)

a) What is the year 0 cash flow for the project?

b) What is the yearly cash flow from the project?

c) The project will run for 5 years. What is the NPV of the project at the current cost of capital?

Reference no: EM131928851

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