A certain company owns a building that be used, for a new warehouse...and it could...
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A certain company owns a building that be used, for a new warehouse...and it could sell it for $100,000 after taxes should it not open the warehouse.
The equipment for the project would be depreciated using straight line methods with the project's 3-year life.
There would be no salvage value.
No new capital would necessary, revenues, and other operating-costs being constant over three year life of project. What's the project's NPV? Use Excel to show work.
Project cost of capital (r) 10.0%
Opportunity cost $100,000
Net equipment cost $65,000
Using the straight line depreciation rate equipment 33.333%
Sales revenues, year $123,000
Operating costs yearly $25,000
Tax rate is 25%
Please Show Excel Functions.
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