问题如下:
Company M has invested $20 million in fixed capital and another $5 million in working capital in a ten-year project. The equipment will be depreciated straight-line to zero over five years. It will generate additional annual revenues of $1.5 million and reduce annual cash operating expenses of $0.5 million. After ten years, the equipment will be sold for $3 million. The tax rate and the required rate of return are 25% and 10% respectively. However, after reappraising the project, the fixed capital investment will be adjusted downward by $2 million with no change in salvage value. What will happen on the project NPV?
选项:
A. It will increase $2.38 million.
B. It will decrease $1.62 million.
C. It will increase $1.62 million.
解释:
C is correct.
考点:Cash Flow Projections: Expansion Project
解析:固定资产投资下降$2 million,折旧会下降$0.4 million,相对应的depreciation tax saving会下降 0.25*($2 million/5) = $0.1 million
所以NPV最终会增加2 - = $1.62 million
老师请问,我这题算出调整前的NPV=-9.1972,调整后的NPV=-7.5763,所以正负号还是需要看的对吧?不应该只看绝对值。考虑了负号这题才能选正确,是上升了。