Andronicus Corporation (AC) has the following jumbled information about an investment proposal Revenues in each of years 14 $34,000 Year 0 initial investment $54,000 Inventory level $17,000 in year 1, $18,900 in year 2, and $12,000 in year 3 Production costs $11,200 in each of years 14 Salvage value $13,400 in year 4 Depreciation 100 immediate bonus depreciation Tax rate 21 There is an additional 6 month lag for all cash flows after year 0 For example, customers pay consistently with a 6 month lag, as AC does for production costs, taxes, etc Draw up a set of cash flow forecasts as in Table 6 4 If the cost of capital is 10 , what is the projects NPV Assume that, if the project generates losses, those losses can be used to offset profits for tax purposes elsewhere in the business Note Do not round your intermediate calculations Round your final answer to the nearest whole dollar amount

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Andronicus Corporation (AC) has the following jumbled information about an investment proposal: Revenues in each of years 14 = $34,000 Year 0 initial investment =

Andronicus Corporation (AC) has the following jumbled information about an investment proposal:

Revenues in each of years 14 = $34,000
Year 0 initial investment = $54,000
Inventory level = $17,000 in year 1, $18,900 in year 2, and $12,000 in year 3
Production costs = $11,200 in each of years 14
Salvage value = $13,400 in year 4
Depreciation = 100% immediate bonus depreciation
Tax rate = 21%
There is an additional 6-month lag for all cash flows after year 0. For example, customers pay consistently with a 6-month lag, as AC does for production costs, taxes, etc.

Draw up a set of cash flow forecasts as in Table 6.4. If the cost of capital is 10%, what is the projects NPV? Assume that, if the project generates losses, those losses can be used to offset profits for tax purposes elsewhere in the business.

Note: Do not round your intermediate calculations. Round your final answer to the nearest whole dollar amount.