Question
Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.1 million. The fixed asset falls into the
| Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.1 million. The fixed asset falls into the 3-year MACRS class (MACRS Table) and will have a market value of $163,800 after 3 years. The project requires an initial investment in net working capital of $234,000. The project is estimated to generate $1,872,000 in annual sales, with costs of $748,800. The tax rate is 21 percent and the required return on the project is 8 percent. |
| What is the project's year 0 net cash flow? |
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| What is the project's year 1 net cash flow? |
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| What is the project's year 2 net cash flow? |
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| What is the project's year 3 net cash flow? |
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| What is the NPV? |
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
12th Edition
978-0030243998, 30243998, 324422695, 978-0324422696
