Question
Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.592 million. The fixed asset will be depreciated
Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.592 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will have a market value of $201,600. The project requires an initial investment in net working capital of $288,000. The project is estimated to generate $2,304,000 in annual sales, with costs of $921,600. The tax rate is 23 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 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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