EX Algo Payback Period; Even Cash Flows Section LO
The following information applies to the questions displayed below.
The management of Niagara National Bank is considering an investment in automatic teller machines. The machines would cost $ and have a useful life of seven years. The bank's controller has estimated that the automatic teller machines will save the bank $ after taxes during each year of their life including the depreciation tax shield The machines will have no salvage value.
Use Appendix A for your reference.
Note: Use appropriate factors from the tables provided.
Algo Part Compute the net present value of the proposed investment.
Compute the net present value of the proposed investment assuming an aftertax hurdle rate of a percent, b percent, and percent.
Note: Do not round intermediate calculations. Negative amounts should be indicated by a minus sign.
tableAfterTax Hurdle Rate,tableNet PresentValuea percent,b percent,c percent,
