A firm is considering a project with the following forecasts:
• The initial after-tax cash outflow will be $500,000 and the appropriate CCA rate is 30 percent.
• There is no terminal loss or CCA recapture associated with the project.
• Annual revenues and costs will be $110,000 and $30,000, respectively.
• The project will last 8 years, and the equipment has an estimated salvage value of $25,000.
• The firm’s required return is 12 percent.
• The firm pays taxes at a marginal rate of 40 percent.
Calculate the NPV, assuming the half-year rule applies in the first year.