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can you explain the formulas used? not sure how to calculate them. Thank you Spooky Halloween Inc. is considering a new 3-year expansion project that
can you explain the formulas used? not sure how to calculate them. Thank you
Spooky Halloween Inc. is considering a new 3-year expansion project that requires an initial fixed asset investment of $4.3 million. The fixed asset falls into the 3-year MACRS class (MACRS Table) and will have a market value of $336,000 after 3 years. The project requires an initial investment in net working capital of $480,000. The project is estimated to generate $3,840,000 in annual sales, with costs of $1,536,000. The tax rate is 34 percent and the required return on the project is 14 percent. (Do not round your intermediate calculations.) Required: (a)What is the project's year O net cash flow? 4,780,000 (b)What is the project's year 1 net cash flow? (c)What is the project's year 2 net cash flow? (Click to select) (d)What is the project's year 3 net cash flow? Click to select) v (e)What is the NPVStep by Step Solution
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