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Fun With Finance is considering a new 3-year expansion project that requires an initial fixed asset Investment of $3.402 million. The fixed asset will
Fun With Finance is considering a new 3-year expansion project that requires an initial fixed asset Investment of $3.402 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will have a market value of $264,600. The project requires an Initial Investment in net working capital of $378,000. The project Is estimated to generate $3,024,000 in annual sales, with costs of $1,209,600. The tax rate is 32 percent and the required return on the project is 17 percent. Required: (a) What is the project's year 0 net cash flow? -3,780,000 (b)What is the project's year 1 net cash flow? (Click to select) (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) (e) What Is the NPV? (Click to select)
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