Question
Corporate Finance 11th edition. My question is for pg 197 question 4 under teh Questions and Problems section. Saying Calculating Project Cash Flow from Assets.
Corporate Finance 11th edition. My question is for pg 197 question 4 under teh Questions and Problems section. Saying
"Calculating Project Cash Flow from Assets. In the previous problem, suppose the project requires an initial investment in net working capital of $285,000 and the fixed asset will have a market value of $225,000 at the end of the project. What is the project's Year 0 net cash flow? Year 1? Year 3? What is the New NPV?"
(just for reference only since question 4 uses info from the previous question: this was question 3 "Calculating Project NPV: Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $1.65 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which, it will be worthless. The project is estimated to generate $1.24 million in annual sales with costs of $485,000. The tax rate is 35% and the required return is 12%. What is the projects NPV?"
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