Question
I have asked this question previously, but the answers I received were wrong. H. Cochran, Inc., is considering a new three-year expansion project that requires
I have asked this question previously, but the answers I received were wrong.
H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,370,000. The fixed asset falls into the three-year MACRS class (MACRS Table). The project is estimated to generate $2,240,000 in annual sales, with costs of $1,230,000. The project requires an initial investment in net working capital of $159,000, and the fixed asset will have a market value of $184,000 at the end of the project. Assume that the tax rate is 35 percent and the required return on the project is 9 percent.
What is the net cash flow of the project each year? (A negative answer should be indicated by a minus sign. Enter your answers in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Year | Cash Flow |
0 | |
1 | |
2 | |
3 | |
What is the NPV of the project? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
NPV $
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