Answers
In second year there is no tax value as theere is loss. the depreciation amount is more than the profit value.
please ask if any query
Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $195,000 and be depreciated on a 3-year MACRS and have no salvage value. The MACRS percentages each year are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. The project will have annual sales of $132,000, variable costs of $35,500, and fixed costs of $12,850. The project will also require net working capital of $3,450 that will be returned at the end of the project. The company has a tax rate of 35 percent and the project's required return is 12 percent. What is the net present value of this project?
In second year there is no tax value as theere is loss. the depreciation amount is more than the profit value.
please ask if any query