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A new project involves the purchase of a $9000 food processing machine. The machine would be depreciated on a straight-line basis over its 3-year
A new project involves the purchase of a $9000 food processing machine. The machine would be depreciated on a straight-line basis over its 3-year useful life to a book value of $356. At the end of the life of the project (at the year 3 point), the machine will be sold for an estimated $746. The project will cause an increase in Sales of $6,445 in each of years 1 through 3. It is also expected to enhance efficiencies and reduce operating expenses by $1,401 in each of years 1 through 3. The project will require an increase in Accounts Receivable of $1,500 and an increase in Accounts Payable of $1,031 up front. The project's impact on these accounts i expected to disappear at project end (in year 3). The firm's marginal tax rate is 40%, and its WACC is 12%. The NPV of this project is $______________. Round your final answer to 2 decimal places (example: if your answer is 12.3456, you should enter 12.35). Margin of error for correct responses: +/-1.00 ($) Rounding and Formatting instructions: Do not enter dollar signs, percent signs, commas, X, or any words in your response. Do not round any intermediate work, but round your final response to 2 decimal places (example: if your answer is 12.3456, 12.3456%, or $12.3456, you should enter 12.35). Note: Answer feedback might show more than 2 decimals -- but you should still follow the above instructions for rounding and entering your answer!
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