Given the following information and assuming a CCA rate of 20%, what is the NPV of this project? Initial investment = $400,000; life = ﬁve years; before-tax cost savings = $150,000 per year; salvage
Value = $30,000 in year 5; tax rate = 34%; discount rate = 14%.

Question

Quizplus · Accepted Answer

The NPV is calculated by considering the initial investment, annual cost savings, tax savings from CCA, salvage value, and discounting these cash flows at the given discount rate. After calculating these components, the NPV is found to be $27,428.

Given the Following Information and Assuming a CCA Rate of 20