Lanyard Company is considering an investment that will generate $600,000 in cash inflows per year for 7 years and has $240,000 of cash outflows for the same period (before income taxes).The cost of the asset is $700,000 and it will be depreciated using straight-line depreciation over the 7 year life.The asset has no salvage value.Lanyard's tax rate is 40%.The cost of capital is 18%.

What is the net present value of this investment (rounded to the nearest dollar)?

Question

Lanyard Company is considering an investment that will generate $600,000 in cash inflows per year for 7 years and has $240,000 of cash outflows for the same period (before income taxes) .The cost of the asset is $700,000 and it will be depreciated using straight-line depreciation over the 7 year life.The asset has no salvage value.Lanyard's tax rate is 40%.The cost of capital is 18%.

What is the net present value of this investment (rounded to the nearest dollar) ?

What is the net present value of this investment (rounded to the nearest dollar)?

Quizplus · Accepted Answer

The Answer of Lanyard Company is considering an investment that will generate $600,000 in cash inflows per year for 7 years and has $240,000 of cash outflows for the same period (before income taxes).The cost of the asset is $700,000 and it will be depreciated using straight-line depreciation over the 7 year life.The asset has no salvage value.Lanyard's tax rate is 40%.The cost of capital is 18%.

What is the net present value of this investment (rounded to the nearest dollar)?

Lanyard Company Is Considering an Investment That Will Generate $600,000