Question
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $830,922. The fixed asset will be depreciated
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $830,922. The fixed asset will be depreciated straight-line to 36,454 over its 3-year tax life, after which time it will have a market value of $115,819. The project requires an initial investment in net working capital of $48,030. The project is estimated to generate $237,059 in annual sales, with costs of $89,708. The tax rate is 0.2 and the required return on the project is 0.14. What is the operating cash flow in years 1 through 3? (Make sure you enter the number with the appropriate +/- sign)
Can the answer be equal to 170,845.33 ?
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