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Input area: Installation cost Pretax salvage value Operating cost per year Initial NWC SASASA A $ 385,000 $ 60,000 $ 135,000 $ 35,000 Tax rate 21% Discount rate 10% Output area: Aftertax salvage value Year 1 OCF Year 2-5 OCF Year 5 net cash flow NPV SA SASA A $ 47,400 $ 187,500 $ 106,650 $ 189,050

Input area: Installation cost Pretax salvage value Operating cost per year Initial NWC SASASA A $ 385,000 $ 60,000 $ 135,000 $ 35,000 Tax rate 21% Discount rate 10% Output area: Aftertax salvage value Year 1 OCF Year 2-5 OCF Year 5 net cash flow NPV SA SASA A $ 47,400 $ 187,500 $ 106,650 $ 189,050

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Input area: Installation cost Pretax salvage value Operating cost per year Initial NWC SASASA A $ 385,000 $ 60,000 $ 135,000 $ 35,000 Tax rate 21% Discount rate 10% Output area: Aftertax salvage value Year 1 OCF Year 2-5 OCF Year 5 net cash flow NPV SA SASA A $ 47,400 $ 187,500 $ 106,650 $ 189,050
Transcribed Image Text:Input area: Installation cost Pretax salvage value Operating cost per year Initial NWC SASASA A $ 385,000 $ 60,000 $ 135,000 $ 35,000 Tax rate 21% Discount rate 10% Output area: Aftertax salvage value Year 1 OCF Year 2-5 OCF Year 5 net cash flow NPV SA SASA A $ 47,400 $ 187,500 $ 106,650 $ 189,050
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