How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask linda_us Your Own Question

linda_us
linda_us, Master's Degree
Category: Single Problem
Satisfied Customers: 787
Experience:  A tutor for Business, Finance, Accounts and other related topics.
19873544
Type Your Single Problem Question Here...
linda_us is online now
A new question is answered every 9 seconds

I cannot figure out how to arrive at the correct answer for

Customer Question

I cannot figure out how to arrive at the correct answer for the question below. The answer is NPV = -1,947.
I calculate the present value for an ordinary annuity for the after tax cash flows (3.17 * 3150.00 (4500*.7). The Present value of the ordinary annuity for the after tax tax shield 3.17 * 1125.00 (3750*.3); however, I arrive at -1448.83 total for NPV and not -1947
"You are considering buying a computer for $15,000. It will provide you with a cash flow of $4,500 per year for 4 years. It is in the 25% CCA rate class. Your tax rate is at 30% and your expected return is at 10% per year.
Submitted: 1 year ago.
Category: Single Problem
Expert:  F. Naz replied 1 year ago.
Is there any salvage value at the end of year 4 for computer, thanks.
Customer: replied 1 year ago.
No, the full question again is as follows: "You are considering buying a computer for $15,000. It will provide you with a cash flow of $4,500 per year for 4 years. It is in the 25% CCA rate class. Your tax rate is at 30% and your expected return is at 10% per year." There is no salvage value.
Expert:  F. Naz replied 1 year ago.
Okay, Will come back to you soon.

Related Single Problem Questions