Determine Net Cash Flows and NPV
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As an alternative to a lease, William and Bart Co. decided to buy a piece of equipment for $250,000, with a useful life of 10 years. Afterwards it can be sold for $20,000. Using the three year MACRS method for depreciation and William and Bart Co estimates cost of capital @ 12% and a tax rate of 20%.
How do determine the net cash flows and NPV with only the initial outlay?
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Solution Summary
Given the details of a purchase, determine the net cash flows and net present value of the project.
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