Pink Drink, Inc. is considering a new three-year expansion project that requires an initial fixed asset investment
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Question:
Pink Drink, Inc. is considering a new three-year expansion project that requires an initial fixed asset investment of $24,600. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is expected to generate $33,200 in annual sales, with costs of $20,100. Assume the tax rate is 21 percent and the required return on the project is 7 percent. What is the projects NPV? (NOTE: Round your answer to the nearest cent)
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