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Halloween Costumes Unlimited is considering a new 3-year store expansion project that requires an initial fixed asset investment of $2.2 million. The fixed asset
Halloween Costumes Unlimited is considering a new 3-year store expansion project that requires an initial fixed asset investment of $2.2 million. The fixed asset falls into the 3- year MACRS class (MACRS Table) and will have a market value of $168,000 after 3 years. The project requires an initial investment in net working capital of $240,000. The project is estimated to generate $1,920,000 in annual sales, with costs of $768,000. The tax rate is 32 percent and the required return on the project is 18 percent. (Do not round your intermediate calculations.) Required: (a)What is the project's year O net cash flow? (Click to select) (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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