Chapters $8/9$: Project NPV

Big Question Inc. is considering a new three$-$year expansion project that requires an initial

fixed asset investment $($capital Spending$)$ of $$1\mathrm{.}2$ million. The fixed asset will be

depreciated straight$-$line to zero over its three$-$year tax life and has ZERO salvage value.

The project is estimated to generate $$1$ million in annual sales, with costs of $$430,000.$ The

tax rate is $21$ percent and the required return is $9\mathrm{.}6$ percent. Suppose the project requires

an initial investment in net working capital of $$250,000.$ What is the project's NPV$?$

Some initial help is provided below.

Note: Enter your number with TWO decimals and without the dollar sign. That is$,$ if your

answer is $$24\mathrm{.}542,$ enter $24\mathrm{.}54.$