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WILL THUMBS AFTER ANSWERING CORRECTLY! Halloween Costumes Unlimited is considering a new 3-year store expansion project that requires an initial fixed asset investment of $5.0
WILL THUMBS AFTER ANSWERING CORRECTLY!
Halloween Costumes Unlimited is considering a new 3-year store expansion project that requires an initial fixed asset investment of $5.0 million. The fixed asset falls into the 3-year MACRS class (MACRS Table) and will have a market value of $390,600 after 3 years. The project requires an initial investment in net working capital of $558,000. The project is estimated to generate $4,464,000 in annual sales, with costs of $1,785,600. The tax rate is 30 percent and the required return on the project is 10 percent. (Do not round your intermediate calculations.) |
Required: | |
(a) | What is the project's year 0 net cash flow? |
(Click to select) -2,137,347 -5,558,000 -5,280,100 -2,256,088 -5,002,200 |
(b) | What is the project's year 1 net cash flow? |
(Click to select) 2,137,347 2,493,572 2,612,313 2,374,830 2,256,088 |
(c) | What is the project's year 2 net cash flow? |
(Click to select) 2,137,347 2,541,630 2,414,548 2,493,572 2,668,712 |
(d) | What is the project's year 3 net cash flow? |
(Click to select) 2,493,572 3,191,580 2,887,620 2,735,640 3,039,600 |
(e) | What is the NPV? |
(Click to select) 935,896 11,463,975 985,153.49 1,034,411 834,987 |
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