Brodigan Corporation has provided the following informationconcerning a capital budgeting project:Investment required in equipment $450,000Net annual operating cash inflow $220,000Tax rate 30%After-tax discount rate 12%The expected life of the project and the equipment is 3years and the equipment has zero salvage value. Thecompany uses straight-line depreciation on all equipmentand the depreciation expense on the equipment would be$150,000 per year. Assume cash flows occur at theend of the year except for the initial investments. Thecompany takes income taxes into account in its capitalbudgeting. The net annual operating cash inflow is thedifference between the incremental sales revenue andincremental cash operating expenses.Required:What is the net present value of the project?
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