Alpine Company is analyzing two investment projects: P and Q. The following data are available:

The computer equipment for Project P will have a total salvage value of $8,000 at end of eight years. It will belong to Class 10 with a 30% maximum CCA rate. At the end of eight years, the working capital for Project Q will be released for use elsewhere. The income tax rate is 30% and Alpine's after-tax cost of capital is 10%.
-What is the approximate present value of the after-tax net annual operating cash inflows for Project P?

Question

Alpine Company is analyzing two investment projects: P and Q. The following data are available:

The computer equipment for Project P will have a total salvage value of $8,000 at end of eight years. It will belong to Class 10 with a 30% maximum CCA rate. At the end of eight years, the working capital for Project Q will be released for use elsewhere. The income tax rate is 30% and Alpine's after-tax cost of capital is 10%.
-What is the approximate present value of the after-tax net annual operating cash inflows for Project P?

Quizplus · Accepted Answer

The present value of after-tax net annual operating cash inflows is calculated by discounting the cash inflows at the project's required rate of return. The correct choice is based on the given options and calculations.

Alpine Company Is Analyzing Two Investment Projects: P and Q