Homework Answers
Net present value of the new oven project: - $ 6,734
| Period | Incremental Operating Cash Flows | Incremental Depreciation | Operating Cash Flows After Taxes | After Tax Salavage Value | Total After Tax Tax Cash Inflows | PV factor at 10.81 % | Present Values |
| 1 | $ 1,400 | $ 9,100 | $ 5,950 | 0 | $ 5,950 | 0.90245 | $5,369.58 |
| 2 | 5,200 | 9,100 | 7,150 | 2,300 | 9,450 | 0.81441 | 7,696.17 |
| Present value of cash inflows | $13,065.75 | ||||||
| Initial Investment | (19,800) | ||||||
| Net Present Value | - $6,734.25 | ||||||
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