Soylent Green is considering a new three$-$year expansion project to try a new product line in its cookie business. The initial outlay in fixed assets is $$2\mathrm{.}7$ million and will be depreciated straight$-$line to zero over its three year tax life. There is an additional investment in net working capital of $$300,000.$ After the $3$ years the company will shut down operations and scrap the remaining assets for $$210,000.$ Yearly sales and COGS will be $$2,080,000$ and $$775,000$ respectively. Assume that the cost of equity is $12\%$ and the tax rate $35\%.$ Calculate the project$$s NPV$.$

Question $14$Answer

a$.$

$$104,622\mathrm{.}30$

b$.$

$$93,930\mathrm{.}22$

c$.$

$$1,163,250\mathrm{.}0$

d$.$

$$102,589\mathrm{.}04$

e$.$

Problem can$$t be calculated with information given.