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Keyser Mining is considering a project that will require the purchase of $980,000 in new...

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Finance

Keyser Mining is considering a project that will require the purchase of $980,000 in new equipment. The equipment will be depreciated straight line to a zero book value over the seven year life of the project. The equipment can be scraped at the end of the project for 5% of original cost. Annual sales from this project are estimated at $420,000. Networking capital equal to 20% of sales will be required to support the project. All of the networking capital will be recouped. The required return Is 16% and the tax rate is 35%. What is the amount of the after tax salvage value of the equipment

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