Zero book value over the five-year life of the project

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A project has an initial requirement of $83,389 for equipment. The equipment will be depreciated to a zero book value over the 5-year life of the project. The investment in net working capital will be $19,548. All of the net working capital will be recouped at the end of the 5 years. The equipment will have an estimated salvage value of $22,842. The annual operating cash flow is $40,658. The cost of capital is 7 percent. What is the project’s net present value if the tax rate is 38 percent?

Reference no: EM131131399

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