After Year 5, the software will become obsolete, so it will have no further impact on the client”s inventory levels.
After Year 5, the software will become obsolete, so it will have no further impact on the client”s inventory levels. Rojas” client is evaluating this software project as it would any other capital budgeting project. The client estimates that the WACC for the software system is 10%. What is the estimated NPV (in millions of dollars) of the new software system? St. John”s Paper is considering purchasing equipment today that has a depreciable cost of $1 million. Assume that the company sells the equipment after three years for $400,000 and the company”s tax rate is 40%. What would be the tax consequences resulting from the sale of the equipment? A. b. c. d. e. There are no tax consequences.
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