Question
Ivashina Enterprises is considering a new project. The project will require $393,403 for new fixed assets, $150,354 for additional inventory, and $36,603 for additional accounts
Ivashina Enterprises is considering a new project. The project will require $393,403 for new fixed assets, $150,354 for additional inventory, and $36,603 for additional accounts receivable. Accounts payable are expected to increase by $70,992. Long-term debt is expected to increase by $288,173. The project has a 5-year life. The fixed assets will be depreciated straight-line to a zero book value over the project's life. At the end of the project, the fixed assets can be sold for 22% of their original cost. The net working capital returns to its original level at the end of the project. The project is expected to generate sales of $779,914 and costs of $659,416 yearly over the project's life. The tax rate is 33%, and the required rate of return is 15%. What is the NPV of the project? Round your responses to two decimal points. Do not include the $ sign.
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