Question
Durant Corporation is considering a new project. The firm has invested $20 million over the last three years on research and development for a package
Durant Corporation is considering a new project. The firm has invested $20 million over the last three years on research and development for a package delivering drone system. The firm believes that the new project will require a $200 million investment today in depreciable assets. The project will also incur $40 million in non-depreciable expenses today as well as require an investment of $15 million in working capital. Finally, the project will required the use of old equipment that could otherwise be sold today for a NSV of $2 million The tax rate facing the firm is 30%. Based on this information, what is the project cash flow for year 0 if the project is accepted today?
Question 13 options:
-$257 million | |
-$245 million | |
-$259 million | |
-$241 million | |
-$265 million |
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