You are considering investment in a project which will cost $50 million which will be depreciated...

You are considering investment in a project which will cost $50 million which will be depreciated to 0 over the next 3 years. The project will generate revenues of $13 million per year for the next 6 years with no expenses (other than depreciation). The company’s cost is capital is 8% and the corporate tax rate is 40%. After the 6 years, the project ends. What is the NPV of the project?

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Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

jeff jeffy answered 1 year ago

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