Question
Halloween Costumes Unlimited is considering a new 3-year store expansion project that requires an initial fixed asset investment of $3.3 million. The fixed asset falls
Halloween Costumes Unlimited is considering a new 3-year store expansion project that requires an initial fixed asset investment of $3.3 million. The fixed asset falls into the 3-year MACRS class (MACRS Table) and will have a market value of $260,400 after 3 years. The project requires an initial investment in net working capital of $372,000. The project is estimated to generate $2,976,000 in annual sales, with costs of $1,190,400. The tax rate is 33 percent and the required return on the project is 9 percent. (Do not round your intermediate calculations.) |
Required: | |
(a) | What is the project's year 0 net cash flow? |
(Click to select) -1,403,384 -3,488,400 -1,481,350 -3,672,000 -3,304,800 |
(b) | What is the project's year 1 net cash flow? |
(Click to select) 1,637,281 1,403,384 1,559,316 1,481,350 1,715,247 |
(c) | What is the project's year 2 net cash flow? |
(Click to select) 1,764,433 1,680,412 1,596,392 1,637,281 1,403,384 |
(d) | What is the project's year 3 net cash flow? |
(Click to select) 1,637,281 1,984,796 1,786,316 1,885,556 2,084,036 |
(e) | What is the NPV? |
(Click to select) 7,619,179 593,276 740,839 705,560.97 670,283 |
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