Problem - Basic NPV with Salvage Value
Redwood Orchards Organics purchased a new composter at a cost of $88,000. Annual operating cash inflows are expected to be $35,000 each year for four years. At the end of the composter's useful life, the salvage value of the tractor is expected to be $4,000.
Required: What is the net present value if the cost of capital is 12 percent? Use the time value of money charts for your calculations. (Ignore income taxes.)