Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please round to TWO DECIMAL places please Simmons, Inc., is considering a new 4-year project that requires an initial fixed asset investment of $2.85 million.

Please round to TWO DECIMAL places please
image text in transcribed
Simmons, Inc., is considering a new 4-year project that requires an initial fixed asset investment of $2.85 million. The fixed asset is eligible for 100 percent bonus depreciation in the first year. At the end of the project, the asset can be sold for $400,000. The project is expected to generate $2.65 million in annual sales, with annual expenses of $915,000. The project will require an initial investment of $450,000 in NWC that will be returned at the end of the project. The corporate tax rate is 24 and the project has a required return of 15 percent. What is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV $ 1286757

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Innovation Commercialization And Start Ups In Life Sciences

Authors: James F. Jordan

1st Edition

1482210126, 978-1482210125

More Books

Students also viewed these Finance questions