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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 $803,500.00 work
ABC Corporation has hired you to evaluate a new FOUR year project for the firm. The project will require the purchase of a $803,500.00 work cell. Further, it will cost the firm $54,800.00 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 $50,400.00. 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 $5,400.00. Finally, the firm will invest $11,600.00 in net working capital to ensure the project has sufficient resources to be successful. The project will generate annual sales of $904,000.00 with expenses estimated at 40.00% 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 $482,000.00 at the end of the fourth year. The firm expects to reclaim 82.00% of the final NWC position. The cost of capital is 14.00%. What is the NPV the project if we end the project after 4 years? Answer format: Currency: Round to: 2 decimal places
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