Law firm is considering investing in a complete small business computer system. initial investment of $35k. the computer is in the 5 year MACRS category, and the firm's tax rate is 34%. The computer system is expected to p rovide additional revenue of $15k per year for the next six years and to reduce expenses by $10k per year for the same period.
a) calculate the net after tax cash flows from this investment
b calculate the net present value of the system, given that the law firm's weighted average cost of capital is 12%
c) should they buy the computer system?
a) calculate the net after tax cash flows from this investment
b calculate the net present value of the system, given that the law firm's weighted average cost of capital is 12%
c) should they buy the computer system?