Explore BrainMass

Explore BrainMass

    Cash flows and NPV

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    A Restaurant is analyzing a project that requires $180,000 of fixed assets. When the project ends those assets are expected to have an after-tax salvage value of $45,000. How is the $45,000 salvage value handled when computing the net present value of the project?

    a. reduction in the cash outflow at time zero
    b cash inflow in the final year of the project
    c cash inflow for the year following the final year of the project
    d cash inflow prorated over the life of the project
    e not included in the net present value

    © BrainMass Inc. brainmass.com June 4, 2020, 12:20 am ad1c9bdddf

    Solution Summary

    The solution explains the correct alternative in respect of cash flows and NPV