Temple Corp. is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated by the straight-line method over its 3-year life, and would have a zero salvage value. No new working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's NPV?
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Risk-adjusted WACC
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10.0%
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Net investment cost (depreciable basis)
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$65,000
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Straight-line deprec. rate
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33.3333%
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Sales revenues, each year
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$65,500
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Operating costs (excl. deprec.), each year
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$25,000
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Tax rate
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35.0%
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