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In: Finance
ABC is a new company established in Victoria. The new equipment XYZ is considering costs $765,000...
ABC is a new company established in Victoria. The new equipment XYZ is considering costs $765,000 and is expected to last for 5 years. The equipment can be sold at $137,000 at the end of the project. The initial net working capital investment is 52,000 and will remain constant throughout the period and 100% will be recovered at the end of the final year. The new equipment will save $120,000 annually before taxes. If the company's required rate of return is 15% and the PVCCATs value is $123,765 determine the NPV value of the project. Assume a tax rate of 30%. The CCA rate is 35%.
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