Jolly Corporation is considering an investment in equipment for $25,000.Data related to the investment are as follows: Jolly 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

Jolly Corporation is considering an investment in equipment for $25,000.Data related to the investment are as follows:  Jolly 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?

Quizplus · Accepted Answer

The Answer of Jolly Corporation is considering an investment in equipment for $25,000.Data related to the investment are as follows:  Jolly 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?

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