In: Accounting
AP. Beyond-Say Corp. is considering purchasing $55,000 of music recording equipment. The equipment has a market resale value of $3,000 and is expected to be used over the next four years. Net income after taxes is estimated to be $4,200. The company’s required rate of return is 10% and the company uses the straight-line method. The tax rate is 40%.
How much is the project’s NPV?
What is the project’s payback period?
How much are the annual recurring cash flows for the first 3 years?
How much is the project’s IRR?