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Halloween Costumes Unlimited is considering a new 3-year store expansion project that requires an initial fixed asset investment of $1.4 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 $1.4 million. The fixed asset falls into the 3-year MACRS class (MACRS Table) and will have a market value of $105,000 after 3 years. The project requires an initial investment in net working capital of $150,000. The project is estimated to generate $1,200,000 in annual sales, with costs of $480,000. The tax rate is 32 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) -1,472,500 -575,027 -606,972 -1,395,000 -1,550,000 |
(b) | What is the project's year 1 net cash flow? |
(Click to select) 575,027 638,918 670,864 702,810 606,972 |
(c) | What is the project's year 2 net cash flow? |
(Click to select) 723,173 688,736 654,299 575,027 670,864 |
(d) | What is the project's year 3 net cash flow? |
(Click to select) 729,491 810,546 851,073 770,018 670,864 |
(e) | What is the NPV? |
(Click to select) 253,836 229,661 3,167,329 195,153 241,748.9 |
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