Question
The ABC Company is considering an expansion of its production facilities which will permit the firm to build and sell a new line of smart
The ABC Company is considering an expansion of its production facilities which will permit the firm to build and sell a new line of smart phones. The project requires a $42446290 capital investment (think new machine) and is expected to have a three-year economic life. The asset will be depreciated to zero using straight line depreciation method over the life of the project.
Other related information: At the end of the project, the equipment can be sold for $2701423. Incremental sales are projected to be $33114235 per year Annual costs (excluding depreciation) are estimated to be $4124105. The project requires a $8052372 initial investment in net working capital. The expected tax rate is 28%. The
project's CASH FLOW on date 0 is?
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