Abco Pty Ltd is considering the purchase of $60 000 in tools. The manager estimates that the tools will generate $25 000 in savings during each year of a four-year life. The tools will be depreciated based on the following schedule.
The expected tax rate is 30 per cent. What is the net present value of the investment, assuming an after-tax hurdle rate of 14 per cent?

Question

Abco Pty Ltd is considering the purchase of $60 000 in tools. The manager estimates that the tools will generate $25 000 in savings during each year of a four-year life. The tools will be depreciated based on the following schedule. 
The expected tax rate is 30 per cent. What is the net present value of the investment, assuming an after-tax hurdle rate of 14 per cent?

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The Answer of Abco Pty Ltd is considering the purchase of $60 000 in tools. The manager estimates that the tools will generate $25 000 in savings during each year of a four-year life. The tools will be depreciated based on the following schedule. 
The expected tax rate is 30 per cent. What is the net present value of the investment, assuming an after-tax hurdle rate of 14 per cent?

Abco Pty Ltd Is Considering the Purchase of $60 000