Cardinal Company is considering a project that would require a $2,975,000 invest
ID: 2355613 • Letter: C
Question
Cardinal Company is considering a project that would require a $2,975,000 investment in equipment with a useful life of five years. At the end of five years, the project would terminate and the equipment would be sold for its salvage value of $300,000. The company
Cardinal Company is considering a project that would require a $2,975,000 investment in equipment with a useful life of five years. At the end of five years, the project would terminate and the equipment would be sold for its salvage value of $300,000. The company
Explanation / Answer
Hi, NPV = -2,975,000 + 1,000,000/(1 + .14)^1 + 1,000,000/(1 + .14)^2 + 1,000,000/(1 + .14)^3 + 1,000,000/(1 + .14)^4 +1,000,000/(1 + .14)^5 = 458081 Thanks, Aman