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avc 07-11-2016 01:27 AM

finance-- evaluate a project
a project is expected to have 2M revenue per year, beginning in year 1. the expense is expected to be 1M per year, escalating at CPI, 2.5%. The depreciation is 100K annually. Besides, expected capital expenditure is 500K per year, escalating at CPI, 2.5%. the cash tax rate is 40 per year. at the end of year 5, the project will be sold for 1M after tax. assuming the discount rate is 10%, what should we pay for the project?

stephie 05-23-2017 09:21 AM

Re: finance-- evaluate a project
wouldn't that be 900k? or am i missing something?

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