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Installation cost Pretax salvage value Operating cost per year Initial NWC Tax rate Discount rate *Depreciation straight-line over life Output area: SA SASA GA 385,000 $ 60,000 135,000 35,000 21% 10% Annual depreciation charge $ 77,000 Aftertax salvage value $ 47,400 OCF $ 122,820 NPV LO 5

Installation cost Pretax salvage value Operating cost per year Initial NWC Tax rate Discount rate *Depreciation straight-line over life Output area: SA SASA GA 385,000 $ 60,000 135,000 35,000 21% 10% Annual depreciation charge $ 77,000 Aftertax salvage value $ 47,400 OCF $ 122,820 NPV LO 5

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
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Installation cost Pretax salvage value Operating cost per year Initial NWC Tax rate Discount rate *Depreciation straight-line over life Output area: SA SASA GA 385,000 $ 60,000 135,000 35,000 21% 10% Annual depreciation charge $ 77,000 Aftertax salvage value $ 47,400 OCF $ 122,820 NPV LO 5
Transcribed Image Text:Installation cost Pretax salvage value Operating cost per year Initial NWC Tax rate Discount rate *Depreciation straight-line over life Output area: SA SASA GA 385,000 $ 60,000 135,000 35,000 21% 10% Annual depreciation charge $ 77,000 Aftertax salvage value $ 47,400 OCF $ 122,820 NPV LO 5
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