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Please use excel functions in answer, fill out the table that is at the bottom. Thank You! Esfandairi Enterprises is considering a new three-year expansion
Please use excel functions in answer, fill out the table that is at the bottom. Thank You!
Esfandairi Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.18 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life. The project is estimated to generate $1.645 millian in annual sales, with casts of $610,000. The tax rate is 21 percent and the required return is 12 percent. Suppose the project requires an initial irvestment in net working capital of $250,000, and the fixed asset will have a market value of $180,000 at the end of the project. What is the project's Year 0 net cash flow? Year 1 ? Year 2 ? Year 3 ? What is the NPV? input areu: \begin{tabular}{|lr|} \hline Asset investment & $2,180,000 \\ Estimated annual sales & $1,645,000 \\ \hline Costs & $610,000 \\ \hline Tax rate & 21% \\ Required return & 12% \\ Project and asset live & 3 \\ \hline Initial investment in NWC & $250,000 \\ Fixed asset value at end & $180,000 \\ \hline \end{tabular} (Use cells A6 to B13 from the given information to complete this question. You must use the built-in Excel function to answer this question. Taxes on the salvage value should be negative for a tax liability and positive for a tax credit.) Output area: Aftertax saluage value Sell equipment Taxes Aftertax salvage value Year 0 Year 1 Year 2 Year 3 Sales Costs $610,000$610,000$610,000 Depreciation EBT Taxes Net income Capital spending Net working capital [$250,000] $250,000 OCF Total cash flow NFVStep by Step Solution
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