Jacuzzi Corporation is considering an investment in equipment for $25,000. Data related to the investment are as follows: Jacuzzi uses the straight-line method of depreciation with no mid-year convention. In addition, its tax rate is 40 percent, and the life of the equipment is four years with no salvage value. Cost of capital is 12 percent.
What is the net present value of the investment?

Question

Jacuzzi Corporation is considering an investment in equipment for $25,000. Data related to the investment are as follows:  Jacuzzi uses the straight-line method of depreciation with no mid-year convention. In addition, its tax rate is 40 percent, and the life of the equipment is four years with no salvage value. Cost of capital is 12 percent.
What is the net present value of the investment?

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The Answer of Jacuzzi Corporation is considering an investment in equipment for $25,000. Data related to the investment are as follows:  Jacuzzi uses the straight-line method of depreciation with no mid-year convention. In addition, its tax rate is 40 percent, and the life of the equipment is four years with no salvage value. Cost of capital is 12 percent.
What is the net present value of the investment?

Jacuzzi Corporation Is Considering an Investment in Equipment for $25,000