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Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.9 million. The fixed asset falls into
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.9 million. The fixed asset falls into the 3-year MACRS class (MACRS Table) and will have a market value of $222,600 after 3 years. The project requires an initial investment in net working capital of $318,000. The project is estimated to generate $2,544,000 in annual sales, with costs of $1,017,600. The tax rate is 31 percent and the required return on the project is 16 percent. (Do not round your intermediate calculations.) Required: (a) What is the project's year 0 net cash flow? (Click to select) -1,285,210 -3,218,000 -3,057,100 -2,896,200 -1,217,567 (b) What is the proiect's year 1 net cash flow? (Click to select) 1,420,495 1,217,567 1,488,138 1,352,853 1,285,210 (c) What is the proiect's year 2 net cash flow? (Click to select) 1,525,463 1,380,180 1,420,495 1,217,567 1,452,822 (d) What is the proiect's year 3 net cash flow? (Click to select) 1,724,568 1,552,111 1,420,495 1,810,796 1,638,339 (e) What is the NPV? (Click to select) 105,985 139,433 132,792.96 6,256,425 126,153
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