Question
A retailer is looking to expand operations at all of their stores for an initial investment of $880. This investment will be depreciated on a
A retailer is looking to expand operations at all of their stores for an initial investment of $880. This investment will be depreciated on a straight line basis over the project's 10 year life. The expansion is expected to produce annual cash inflows of $580 in consecutive years over the life of the project beginning one year from today, while also producing annual cash outflows of $340 in consecutive years over the life of the project, also beginning one year from today.
What is the project's NPV if the corporate tax rate is 36% and the project's required rate of return is 13%?
$_________ Place your answer in dollars and cents without the use of a dollar sign or a comma. If applicable, negative values should be entered with a minus sign in front of the number. Work all analysis out using at least 4 decimal places of accuracy.
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