Orange Logistic is thinking of opening a new warehouse. The company owns the building that would be used, and it could see it for $100,000 after taxes if it decides not to open the new warehouse. The equipment for the project would be depreciated by the straight-line method over the projects 3 year life, after which it would be worth nothing and thus it would have 0 salvage value. No new working capital would be required, and revenues and other operating costs would be constant over the projects 3 year life. What is the project NPV? cash flows are constant in years 1-3
WACC = 10%
Opportunity cost = 100,000
Net equipment cost (depreciable basis) 65,000
Straightened deprecate = 33.33%
Sales rev = 123,000 yearly
Operating costs 25000
Tax rate 35%
Just need to see how to calculate in excel.