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ABC Corporation has hired you to evaluate a new FOUR year project for the firm. The project will require the purchase of a $758,600.00 work
ABC Corporation has hired you to evaluate a new FOUR year project for the firm. The project will require the purchase of a $758,600.00 work cell. Further, it will cost the firm $53,700.00 to get the work cell delivered and installed. The work cell will be straight-line depreciated to zero with a 20- year useful life. The project will require new employees to be trained at a cost of $57,700.00. The project will also use a piece of equipment the firm already owns. The equipment has been fully depreciated, but has a market value of $6,400.00. Finally, the firm will invest $10,900.00 in net working capital to ensure the project has sufficient resources to be successful. The project will generate annual sales of $911,000.00 with expenses estimated at 36.00% of sales. Net working capital will be held constant throughout the project. The tax rate is 38.00%. The work cell is estimated to have a market value of $470,000.00 at the end of the fourth year. The firm expects to reclaim 86.00% of the final NWC position. The cost of capital is 13.00%. What is the NPV the project if we end the project after 4 years? Submit Answer format: Currency: Round to: 2 decimal places
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