Homework Answers
Book Value = Purchase Price – Depreciation for 5 years
= 406,278*(100-14.29-24.49-17.49-12.49-8.93)%
= $90,640.62
Selling price = $40,721
Loss on Sale = $49,919.62
Tax savings = $18,969.46
Net Selling value or cash flow = $40,721 + 18.969.46
= $59,690.46
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a) What is the project cash flow for year
1?
b) What is the project cash flow for year 2? (include
the terminal cash flow here)
c) What is the NPV of the project?
(please answer all parts individually)
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