What is the NPV of an investment with the following information: Initial investment at time t=0 is
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Question:
What is the NPV of an investment with the following information:
- Initial investment at time t=0 is $1,600,000
- Life of project is 10 years
- Initial investment depreciated to $0 via straight-line over entire life
- NWC investment required = $0.00
- Expected market salvage value of investment assets = $0.00
- Starting 1-year from today, and remaining constant over project life:
- Incremental sales as a result of investment = $1,400,000 / year
- Incremental expenses as a result of investment = $1,000,000 / year
- firm' tax rate = 32%
- required return on investment = 12%
Enter answer in dollars, rounded to the nearest dollar.
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