Question
The UltimateFlyingDisc Company considering a new expansion project that requires a fixed asset purchase of $ 300 that will be incurred today. The fixed asset
The UltimateFlyingDisc Company considering a new expansion project that requires a fixed asset purchase of $300 that will be incurred today. The fixed asset is expected to last for 10 years and be worthless at the end of its useful life. The depreciable base is the entire amount of investment, and straight line depreciation will be used. The project is expected to generate $580 in cash flows per year and incur $325 in expenses per year, both starting in one year and continuing at the end of each year over the project life. IF the tax rate is 30% and the required rate of return is 7%, what is the net present value of the project? Work your analysis using at least 4 decimal places of accuracy. NPV $=?
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